2010 (9) TMI 898 - AT - Income Tax

Summary

Issues:
Validity of certificate issued under section 80G of the Income-tax Act, 1961.

Analysis:
The Appellate Tribunal ITAT Kolkata addressed the issue of the validity of a certificate issued under section 80G of the Income-tax Act, 1961. The assessee challenged the order of the Director of Income-tax (Exemption) on the grounds that the certificate should be valid till canceled. The Director had issued a certificate to a specific entity, stating the conditions and validity from 1-3-2010 to 31-3-2012. The assessee contended that the certificate should be valid until canceled. The Tribunal considered the arguments presented by both parties.

The Tribunal noted that the issue was similar to a previous case involving the D.J. Shah Foundation, where the Tribunal had directed the modification of an exemption certificate. The Departmental representative argued that the certificate did not require modification as it was issued in accordance with the relevant rule, Rule 11AA. However, the Tribunal referred to a Board Circular indicating that approvals expiring before October 1, 2009, needed renewal and would be valid until canceled. The Tribunal emphasized that favorable circulars are binding on the Revenue.

Based on the precedent set by the D.J. Shah Foundation case and the Board Circular, the Tribunal directed the Director of Income-tax (Exemption) to modify the exemption certificate to be valid from the assessment year 2010-11 onwards until canceled. Consequently, the Tribunal allowed the appeal of the assessee, ruling in favor of modifying the certificate as requested. The decision was made in line with the previous ruling and the principles established in the Board Circular, ensuring the validity of the certificate until canceled.