2001 (12) TMI 39 - HC - Income Tax

Summary

Issues:
- Continuation of approval under section 80G(5)(vi) of the Income-tax Act, 1961
- Refusal of continuation of approval by the respondent
- Allegations of furnishing inaccurate particulars
- Outstanding demands for the assessment year 1997-98
- Violation of provisions of section 13(1)(c) of the Act

Analysis:
The petitioner, an institution formed for charitable activities, sought a writ of mandamus for continuation of approval under section 80G(5)(vi) of the Income-tax Act, 1961. The respondent had refused continuation citing inaccurate particulars, outstanding demands for 1997-98, and alleged violations of section 13(1)(c) of the Act. The Court examined the relevant provisions of section 80G(5) and rule 11AA of the Income-tax Rules. The rule outlines the application process and conditions for approval under section 80G. It was noted that the Act does not mandate continuation of benefits upon payment of outstanding demands. The petitioner's appeal against the demands had been successful, with the Tribunal affirming its charitable activities and income exemption under section 11. The Court concluded that the refusal of continuation based on the outstanding demand was unjustified and lacked factual basis. The impugned order was deemed perverse, leading to its quashing and directions for reconsideration of the application within eight weeks.

In summary, the Court found the grounds for refusal of continuation of approval to be unfounded and directed the Commissioner to reevaluate the application for approval under section 80G(5) expeditiously. The judgment highlighted the importance of factual basis and adherence to legal provisions in decisions regarding tax benefits for charitable institutions.