TMI Blog2012 (11) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi dated 13th September, 2011 whereby the application for renewal of exemption u/s 80G(5)(vi) of Income-tax Act, 1961 (the Act) has been rejected. The grounds of appeal read as under:- 1. That on the facts and in the circumstances of the case, the learned Director of Income Tax (Exemptions), New Delhi (hereinafter called DIT for short) erred in rejecting the application of the appellant seeking exemption u/s 80G of the Income Tax Act, 1961 (hereinafter called the Act for the sake of brevity). 2. That on the facts and in the circumstances of the case, DIT failed to consider and hold that the appellant was an institution for a charitable purpose in as much as it was engaged in providing Education within the meaning of that word in Section 2 (15) of the Act. 3. That without prejudice to the generality of Grounds of Appeal No.1 2 above, DIT erred in holding that the appellant was carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration and, therefore, the appellant is not covered by the mischief of the proviso to Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought to the Act w.e.f. 1st October, 2009 where exemption has already been allowed/granted uptill 31st March, 2010 shall be deemed to have been extended in perpetuity unless specifically withdrawn and reliance is placed on the Board Circular No.7/2010 (F.No.197/21/2010 ITA-I) dated 27th October, 2010 and, thus, it is the case of the assessee that the denial of renewal is contrary to the provisions of law. Reference is also made to the decision of Hon ble Allahabad High Court in the case of Babu Hargovind Dayal Trust vs. ITAT (2011) 199 Taxman 138 (All). 5. On the other hand, the learned DR relied upon the order of the DIT (E) and pleaded that assessee s activity is not of charitable nature and, hence, ld. DIT (E) was right in denying the renewal of approval u/s 80G. 6. After hearing both the parties, we find that the present issue is covered by the decision of this Tribunal in the case of Educate India Society vs. DIT (E), order dated 28th October, 2011 in ITA No.3895/Del/2011 in which similar issue was raised by the assessee and the appeal was decided in favour of the assessee. For the sake of convenience, the said order is reproduced below:- This is an appeal filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Educate India Society. 3. Along with the aforementioned covering letter, various documents were also filed which, inter alia, contained copy of application in Form 10G; photo copy of 80G certificate; photo copy of registration u/s 12A(a) of the Act; photo copy of ITR for the last three years; copy of audited balance sheets for the last three years, etc. From the order of Ld. DIT (E), it appears that the assessee did not appear in response to the notices issued by him. Therefore, taking into account the non-appearance of the assessee, ld. DIT (E) has rejected the application of the assessee by observing that in the absence of documentary evidence of charitable activities and also misuse of corpus donation received from donors for a particular purpose, the assessee did not satisfy the conditions laid down u/s 80G(5) of the Act. The assessee is aggrieved by such order passed by ld. DIT (E) and, hence, has filed the aforementioned appeal. 4. At the outset, it was submitted by the learned AR that by omission of the proviso to Section 80G(5) (vi), the assessee s obligation to seek such renewal has been done away with and this position of law has been made clear by the CBDT vide it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of validity of approval under section 80G subsequent to 1-10-2009, especially in view of the fact that no corresponding change has been made in Rule 11A(4). To remove any doubts in this regard, it is reiterated that any approval under section 80G(5) on or after 1-10-2009 would be a one time approval which would be valid till it is withdrawn. 5. He further submitted that interpreting the statutory provisions in the light of the omission of proviso to Section 80G (5)(vi), Hon ble Allahabad High Court in the case of Babu Hargovind Dayal Trust vs. ITAT (2011) 199 Taxman 138 (All) has ruled that 80G exemption shall be deemed to be continued in perpetuity and it will continue so long as it is not withdrawn as per the provisions of IT Act. In that case the application for renewal was made on 31st March, 2010 as said exemption was expiring after 1st October, 2009. It was held that the directions of CIT (A) for rejection of renewal application was not required to be maintained as by virtue of operation of law the exemption shall be deemed to be continued in perpetuity and it will continue so long as it is not withdrawn as per the provisions of the Act. He has also placed a copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011. Firstly, it has to be seen that whether or not the assessee was under any obligation to seek such renewal. The aforementioned proviso has been omitted from 1.10.2009 and such omission of proviso has been interpreted by the CBDT in aforementioned Circular No.7/2010 and it has been mentioned in the Circular that various references have been received by the Board from the field formations as well as from the members of public about the period of validity of approvals granted u/s 80G (5) of the Act and in view to resolve such references the Board has clarified the omission of aforementioned proviso is interpreted to mean that the approval once granted shall continue to be valid in perpetuity. At the same time it has been mentioned that the Commissioner will also have the power to withdraw the approval if the commissioner is satisfied that the activities of such institution or fund are non-genuine or are not being carried out in accordance with the objects of the institution or fund. No material whatsoever has been brought on record to suggest that the approval granted by the department to the assessee u/s 80G has ever been withdrawn. What has been considered by the ld. DIT (E) in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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