M/s. Ina Raja Memorial Education Trust, New Delhi V. DIT (Exemptions), New Delhi

ITA 4640/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53439 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-12-2011
• Assessment Year: misc
• Appeal Filed On: 20-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Keywords: Opportunity of being heard
• Section: 80G; 2

Judgement Text

ITA NO.4640/DEL/2011 1 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.4640/DEL/2011 ASSTT. YEAR: ---- INA RAJA MEMORIAL EDUCATION TRUST, VS DIT (EX EMPTIONS), THROUGH SH. RASIK MAKKAR, CA 3 RD FLOOR, AAYAKAR BHAWAN, N-59, GREATER KAILASH-I, DISTT. CENTRE, LAXMI NAGAR, NEW DELHI. NEW DELHI-110092 (PAN NO. AAATI1432L) (APPELLANT) (RE SPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI SALIL MISHRA , SR. DR O R D E R PER C. L. SETHI, J.M. THE ASSESSEE TRUST IS IN APPEAL AGAINST THE ORDER DATED 18.8.2011 PASSED BY LEARNED DIT(E), REJECTING THE ASSESSEES APPLICATION FURNISHED IN FORM NO. 10G, FOR RENEWAL OF EXEMPTION U/S 80G OF T HE I.T. ACT, 1961 (THE ACT). 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS TAKEN ONE LEGAL PLEA THAT WHILE REJECTING THE ASSESSEES APPLICATION FOR RENE WAL OF EXEMPTION U/S 80G FILED ON 24.12.2011, THE LEARNED DIT(E) HAS IGNORED THE AMENDMENT MADE IN ITA NO.4640/DEL/2011 2 SECTION 80G(5)(VI) BY THE FINANCE ACT (NO.2) 2009, WHEREBY THE PROVISO TO THE SAID CLAUSE(VI) OF SUB-SECTION (5) HAS BEEN OMI TTED. IT HAS BEEN FURTHER CONTENDED THAT THE BOARD CIRCULAR DATED 3.6.2010 AN D 27.10.2010 HAS ALSO NOT BEEN TAKEN INTO ACCOUNT BY THE LEARNED DIT(E). 3. WHEN THIS APPEAL WAS CALLED UPON FOR HEARING, WE FIND THAT AN ADJOURNMENT APPLICATION HAS BEEN PLACED ON RECORD, SEEKING ADJOURNMENT BY THE LD. COUNSEL FOR THE ASSESSEE FOR THE REASON THA T HE WOULD NOT BE ABLE TO ATTEND THE HEARING AS HIS BROTHER MET WITH A SEVERE ACCIDENT YESTERDAY AND SUFFERED MULTIPLE FRACTURES ON HIS LEG, SHOULDER AN D UPPER ARM. HOWEVER, HAVING REGARD TO THE FACT THAT THE ISSUE INVOLVED I N THIS CASE ABOUT THE APPLICABILITY OF THE DELETION OF THE PROVISO TO SEC TION 80G(5)(VI) IS IN FAVOUR OF THE ASSESSEE, WE DECIDED TO PROCEED TO DISPOSE O F THIS APPEAL AFTER HEARING THE LD. DR. LD. DR WAS ACCORDINGLY HEARD. 4. IN THIS CASE, THE ASSESSEE MADE AN APPLICATION O N 24.2.2011 IN FORM NO. 10G, SEEKING RENEWAL OF EXEMPTION U/S 80G OF TH E ACT, WHICH HAS BEEN REJECTED BY THE LD. CIT(A) BY OBSERVING THAT THE AS SESSEE HAS FAILED TO FURNISH BILLS/VOUCHERS OF EXPENSES AND CERTAIN OTHE R DETAILS AS STATED BY HIM IN PARA 2 OF HIS ORDER. IN THIS CONNECTION, IT IS PERTINENT TO NOTE THAT PROVISO TO CLAUSE (VI) OF SECTION 80(G) SUB-SECTION (5) HAS BEEN OMITTED BY THE FINANCE ACT (NO. 2) 2009 W.E.F. 1.10.2009. AS PER CLAUSE (VI) OF SECTION ITA NO.4640/DEL/2011 3 80G(5) OF THE ACT, INSTITUTION OR FUND, TO WHICH DO NATIONS ARE MADE, HAVE TO BE APPROVED BY THE COMMISSIONER OF INCOME TAX, IN A CCORDANCE WITH THE RULES PRESCRIBED IN RULE 11AA OF THE INCOME TAX RUL ES, 1962. THE PROVISO TO THIS CLAUSE PROVIDED THAT ANY APPROVAL GRANTED U NDER THIS CLAUSE SHALL HAVE EFFECT FOR SUCH ASSESSMENT YEAR OR YEARS, NOT EXCEE DING FIVE ASSESSMENT YEARS, AS MAY BE SPECIFIED IN THE APPROVAL. HOWEVE R, THIS PROVISO IMPOSING THE LIMITATION OF FIVE YEARS HAS SINCE BEEN OMITTED BY THE FINANCE ACT, 2009 W.E.F. 1.10.2009 TO PROVIDE THAT THE APPROVAL ONCE GRANTED SHALL CONTINUE TO BE VALID IN PERPETUITY. THE IMPACT AND SCOPE OF TH E OMISSION OF PROVISO TO CLAUSE (VI) OF SUB-SEC. (5) OF SEC. 80G HAS BEEN EX PLAINED BY THE BOARD IN ITS CIRCULAR NO. 5 DATED 3.6.2010, CLARIFYING THAT THE EXISTING APPROVAL EXPIRING ON OR AFTER 1 ST OCTOBER, 2009 SHALL BE DEEMED TO HAVE BEEN EXTENDE D IN PERPETUITY, UNLESS SPECIFICALLY WITHDRAWN. PARA 29 .7 OF THE SAID CIRCULAR PROVIDES THAT THE AMENDMENT OMITTING THE PROVISO TO CLAUSE (VI) OF SUB- SECTION (5) OF SECTION 80G HAS BEEN MADE APPLICABLE WITH EFFECT FROM 1 ST OCTOBER, 2009 AND, ACCORDINGLY, EXISTING APPROVALS, EXPIRING ON OR AFTER 1 ST OCTOBER, 2009, WILL BE DEEMED TO HAVE BEEN EXTENDED IN PERPETUITY UNLESS SPECIFICALLY WITHDRAWN. THEREFORE, IN THE PRESENT CASE, THE APPROVALS ALREADY GRANTED TO THE ASSESSEE U/S 80G, IF EXPIRING ON OR AFTER 1.10.2009, SHALL BE DEEMED TO HAVE BEEN EXTENDED IN PERPETUITY AND THE QUESTION OF FILING ANY ITA NO.4640/DEL/2011 4 FRESH APPLICATION FOR RENEWAL OF EXEMPTION IS NOT N ECESSARY. IN THIS CONNECTION, RELIANCE MAY BE PLACED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF BABU HARGOVIND DAYAL TRUS T VS ITAT(2011) 199 TAXMAN 138(ALL.), WHERE THE HONBLE HIGH COURT HAS HELD THAT EXEMPTION ALREADY GRANTED ON OR AFTER 1.10.2009 SHALL BE DEEM ED TO BE CONTINUED IN PERPETUITY AND IT WILL CONTINUE SO LONG AS IT IS NO T WITHDRAWN, AS PER THE PROVISIONS OF THE ACT. THIS ASPECT OF THE MATTER, ABOUT THE OMISSION OF PROVISO TO SECTION 80G(5)(VI) READ WITH THE BOARDS CIRCULAR, HAS NOT BEEN CONSIDERED BY THE LD. DIT(E) WHILE REJECTING THE AS SESSEES APPLICATION FOR RENEWAL OF EXEMPTION. WE, THEREFORE, RESTORE THIS MATTER BACK TO THE FILE OF THE DIT(E) WITH THE DIRECTION TO TREAT THE APPROVAL OF EXEMPTION GRANTED EARLIER U/S 80G OF THE ACT TO THE ASSESSEE IN PERPE TUITY, PROVIDED THE EARLIER EXEMPTION GRANTED U/S 80G OF THE ACT TO THE ASSESSE E WAS TO EXPIRE ON OR AFTER 1.10.2009 AND, IN THAT CASE, THE QUESTION OF RENEWAL OF EXEMPTION U/S 80G WOULD NOT ARISE. OTHERWISE, THE DIT(E) SHALL E XAMINE THE MATTER AFRESH, AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO PRODUCE ALL THE DETAILS AS REQUIRED BY HIM AND S HALL DECIDE THE ISSUE AS PER LAW CONTAINED IN THAT BEHALF. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED TO BE ALLOWED IN THE MANNER AS INDICATED ABOVE. ITA NO.4640/DEL/2011 5 ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21ST DE CEMBER, 2011. SD/- SD/- (SHAMIM YAHYA ) ( C.L. SETH I ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 21ST DECEMBER, 2011 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (A) 4. CIT 5. DR BY ORDER DY. REGISTRAR