Karol Bagh Bangiya Samsad, New Delhi V. DIT (Exemptions), New Delhi

ITA 4225/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59025 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-03-2012
• Assessment Year: misc
• Appeal Filed On: 21-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: AKHIL JI NDAL
• Keywords: Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 4225/DEL/2011 ASSESSMENT YEAR: - KAROL BAGH BANGIYA SAMSAD, VS. DIRECTOR OF INCOME- TAX (EXEM.) C/O. JINDAL & CO., 3802 DAVID ST. DELHI. DARYAGANJ, DELHI-1100 02 (PAN: AAAAK5730E) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AKHIL JI NDAL, CA RESPONDENT BY: MS. Y. KAKKAR, D R DATE OF HEARING : 29.03.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF LEARNED DIRECTOR OF INCOME-TAX (EXEMPT ION) UNDER SECTION 80G(5) OF THE INCOME-TAX ACT, 1961. 2. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER OF LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION) SUBMITTE D THAT THE ASSESSEE HAS INADVERTENTLY FILED THE PRESENT APPLICATION FOR REN EWAL OF APPROVAL UNDER SECTION 80G(5) OF THE ACT. HE POINTED OUT THAT SECT ION 80G(5)(VI) SPECIFYING THE TIME LIMIT FOR GRANT OF APPROVAL HAS BEEN AMEND ED BY FINANCE ACT, 2009 AND AFTER THE AMENDMENT ONCE APPROVAL GRANTED, IT W ILL BE PERPETUAL UNLESS 2 CANCELLED OR WITHDRAWN BY THE COMPETENT AUTHORITY. HE FURTHER SUBMITTED THAT THE BOARD HAS ISSUED A CIRCULAR BEARING NO. 5 OF 2010 WHICH EXPLAINED FINANCE ACT, 2009. ACCORDING TO THIS CIRCULAR, ALL APPROVALS ALREADY GRANTED TO THE ASSESSEE UNDER SEC. 80G, IF EXPIRING ON OR A FTER IST OF OCTOBER 2009 THEN IT WOULD BE DEEMED TO HAVE BEEN EXTENDED IN PE RPETUITY. THE APPROVAL IN THE CASE OF ASSESSEE WAS AVAILABLE UP TO 31.3.20 11, MEANING THEREBY, ITS APPROVAL IS DEEMED TO HAVE BEEN EXTENDED FOR PERPET UITY AND THE APPLICATION MOVED BY THE ASSESSEE OUGHT TO HAVE BEEN DISMISSED AS INFRUCTUOUS BY THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION) INSTEAD OF REJECTING IT ON MERIT. HE FURTHER SUBMITTED THAT AN IDENTICAL ISSUE COME U P BEFORE THE ITAT IN THE CASE OF HARNAM SINGH HARBANS KAUR VS. D.I.T. HE PLA CED ON RECORD THE COPY OF THE ITATS ORDER. 3. ON THE OTHER HAND, LEARNED DR RELIED UPON THE OR DER OF THE D.I.T. SHE POINTED OUT THAT LEARNED DIRECTOR OF INCOME-TAX (EX EMPTION) HAS DENIED THE APPROVAL UNDER SEC. 80G(5) ON MERIT, THEREFORE, IT AMOUNTS TO WITHDRAWAL OF APPROVAL IN A WAY. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT PRIOR TO AMENDMENT T O SECTION 80G(5)(VI) OF 3 THE ACT, THERE WAS A PROVISO WHICH PROVIDE TIME LIM IT FOR THE APPROVAL. THE PROVISO READS AS UNDER: PROVIDED THAT ANY APPROVAL SHALL HAVE EFFECT FOR S UCH ASSESSMENT YEAR OR YEARS, NOT EXCEEDING FIVE ASSESSMENT YEARS, AS M AY BE SPECIFIED IN THE APPROVAL. 5. THIS TIME LIMIT HAS BEEN ELIMINATED BY DELETING THE PROVISO TO THIS SUB- SECTION. THE BOARD HAS ISSUED A CIRCULAR I.E. CIRCU LAR NO. 5 OF 2010 WHICH EXPLAINED THE FINANCIAL (NO.2) ACT, 2009. PARA 29.7 OF THE CIRCULAR, WHICH IS RELEVANT FOR SECTION 80G, THE BOARD HAS OPINIONED A S UNDER: 29.7. APPLICABILITY THIS AMENDMENT HAS BEEN MA DE APPLICABLE W.E.F. IST OCTOBER 2009. ACCORDINGLY, EXISTING APPR OVALS EXPIRING ON OR AFTER IST OCTOBER 2009 WILL BE DEEMED TO HAVE BE EN EXTENDED IN PERPETUITY UNLESS SPECIALLY WITHDRAWN. HOWEVER, IN CASE OF APPROVAL EXPIRING BEFORE IST OCTOBER, 2009, THESE WILL HAVE TO BE RENEWED AND ONCE RENEWED THESE SHALL CONTINUE TO BE VALID IN PE RPETUITY, UNLESS SPECIFICALLY WITHDRAWN. 6. THE APPROVAL GRANTED ON 29.01.2008 UNDER SECTION 80G(5)(VI) OF THE ACT TO THE ASSESSEE WAS VALID FROM 01.04.2008 TO 31 .03.2011 MEANING THEREBY, THE MOMENT, THE AMENDMENT TO SECTION 80G(5 )(VI) BY VIRTUE OF FINANCE ACT, 2009 HAS BEEN EFFECTED, THE APPROVAL A VAILABLE TO THE ASSESSEE UNDER SEC. 80G(5)(VI) OF THE ACT WOULD BE DEEMED TO HAVE BEEN INTACT IN 4 PERPETUITY AND THE ASSESSEE WAS NOT SUPPOSED TO FIL E THE APPLICATION FOR RENEWAL. THE MOMENT THIS APPLICATION CAME TO THE LE ARNED DIRECTOR OF INCOME-TAX (EXEMPTION), HE OUGHT TO HAVE DISMISSED IT AS INFRUCTUOUS ON THE GROUND THAT ASSESSEE ALREADY ENJOYING THE APPROVAL. IF THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION) HAD ANY RESERVATION THEN HE OUGHT TO HAVE ISSUED A NOTICE FOR CANCELLATION OF THE APPROVAL IF THE LAW PERMITS TO DO SO. THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION) INDIRECT LY BY REJECTING THE APPLICATION OF THE ASSESSEE ON MERIT CANNOT WITHDRA W THE APPROVAL WHICH IS AUTOMATICALLY RENEWED BY VIRTUE OF FINANCE ACT, 200 9. THEREFORE, WE ALLOW THE APPEAL OF ASSESSEE. THE APPLICATION UNDER SECTI ON 80G(5)(VI) FILED BY THE ASSESSEE FOR GRANT OF APPROVAL BE TREATED AS REJECT ED FOR STATISTICAL PURPOSES BUT WE MAKE IT CLEAR THAT ASSESSEE WOULD BE ENJOYIN G THE APPROVAL BY VIRTUE OF THE ORDER DATED 29.01.2008 PASSED BY THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30.03.20 12 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/03/2012 MOHAN LAL 5 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR