TMI Blog2011 (2) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... unless and until the concerned authority takes appropriate action in accordance with law - Decided in favour of assessee. - ITA No. 674/Luck/2010 - - - Dated:- 28-2-2011 - N.K. Saini, J ORDER N.K. Saini, J 1. This is an appeal by the assessee against the order dated 29.9.2010 of the CIT-I, Lucknow. The following grounds have been raised in this appeal:- I. The Learned Commissioner of Income-tax-I, Lucknow [here-in-after referred to as the Ld. CIT] grossly erred on facts and in law in rejecting the claim of the appellant Trust for renewal under section 80G(5) of the I.T. Act, 1961 as subsequent to the amendment in the Act w.e.f. 1-10-2009 the proviso to section 80G(5)(vi) has been omitted and thus no fresh approval is required and that the same was available for life and thus the order passed in violation of the Act is not sustainable and needs to be quashed. II. The Ld. CIT further grossly erred on facts and in law in refusing the renewal under section 80G(5) as the Registration granted under section 12A was not cancelled and thus the renewal could not have been rejected and thus may kindly be allowed. Notwithstanding And Without Prejudice to Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the laws and rules meant for women empowerment. At a few occasions the seminars and workshops have been conducted in Star Hotels. The amount spent directly on the assistance provided to beneficiaries is quite small. On perusal of accounts, it was seen that various payments have been made to trustees in all the three preceding years but these payments have not been reported in annexure-II to the audit report in form 10B. On being confronted, the authorized representative Shri S.R. Lath, CA furnished a reply dated 13.9.2010 stating therein that these payments are authorized by the resolution dated 22.7.1999 of Board of Trustees and are in the nature of either reimbursement or for services rendered by them and that is why the same were not reported in the audit report. He also furnished a chart showing that the amounts paid to trustee in F. Y's. 2006-07, 2007-08 and 2008-09 are Rs.97,500, Rs.1,19,955 and Rs.3,76,119 respectively. He could not furnish any details of services rendered by the trustees. The reply of the authorized representative has been considered and found to be justified and convincing. In view of the above, I am inclined to hold that the audit report and acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax-I, Lucknow on 31.3.2010. The said application was filed under mistaken belief that the approval has to be renewed and the amendment omitting the proviso which provided for renewal was not in the knowledge of the assessee-trust. It was further submitted that the proviso had been omitted only in this year which escaped the attention of the counsel and the application for renewal was filed inadvertently. In support of the above, the assessee furnished an affidavit of the Managing Trustee, Smt. Tulika Srivastava. It was contended that as per the provisions as contained in section 80G(5)(vi) of the Act, the institutions or funds to which donations are made had to be approved by the ld. Commissioner of Income-tax in accordance with the rules prescribed in Rule 11AA of the Income-tax Rules, 1962 and further as per provisions of section 80G(5)(vi) of the Act the approval was to be renewed from time to time. The said clause provided that any approval granted under this clause shall have the effect for such assessment year or years not exceeding five assessment years as may be specified in the approval. It was further submitted that the aforesaid clause has been omitted w.e.f. 1.10.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that an admission or an acquiescence cannot be a foundation for an assessment where the income is returned under the erroneous impression or misconception in law. Reliance was placed on the judgment of the Hon'ble Jurisdictional High Court in the case of Abdul Qaume v. CIT [1990] 184 ITR 404. It was further stated that the Legislature has introduced section 293C of the Act w.e.f. 1.10.2009 to provide powers to the authority to withdraw such approval, in case the authority wants to withdraw any approval he has to first invoke the provisions of this section and issue a show cause notice against the proposed withdrawal to the assessee concerned and since in the case of the assessee the ld. Commissioner of Income-tax acted beyond his jurisdiction in passing the impugned order and thus the order so passed needs to be quashed. 9. In his rival submissions, the ld. D.R. strongly supported the order of the ld. Commissioner of Income-tax and submitted that the Board Circular relied upon by the ld. counsel for the assessee does not allow continuation of section 80G recognition in perpetuity in an unqualified manner because the said section says that a renewed section 80G recognition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is not in dispute that the assessee-trust is registered with the Sub-Registrar, Lucknow, having registration under section 12AA of the Act also which has been granted by the ld. Commissioner of Income-tax, Lucknow vide order dated 10.2.2010. The assessee was also granted approval under section 80G(5)(vi) of the Act w.e.f. 10.3.2000 which was valid till 31.3.2003 and later on renewal of the approval under the said section was granted vide order dated 9.9.2003 from 1.4.2003 to 31.3.2006, again vide order dated 7.12.2006 from 1.4.2006 to 31.3.2008and finally vide order dated 16.9.2008 from 1.4.2008 to 31.3.2010 by the ld. Commissioner of Income-tax-I, Lucknow. The copies of the said orders are placed at pages 41, 40 and 39 respectively of the assessee's paper book. Earlier as per provisions contained in clause (vi) to sub-section (5) of section 80G, the approval was to be granted by the ld. Commissioner of Income-tax in accordance with Rules prescribed in Rule 12AA of the Income-tax Rules, 1962 and as per the proviso to section 80G(5)(vi) of the Act, the approval was to be renewed from time to time. However, considering the hardship, the Legislature in all its wisdom has sought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawn." 11. From the above it is crystal clear that the approval once granted under section 80G(5)(vi) of the Act shall continue in perpetuity. It is also noticed that the CBDT issued its circular No.5 being "Explanatory circular for Finance (No. 2) Act, 2009" and para 29.7 of the said Circular reads as under:- "29.7 Applicability "This amendment has been made applicable w.e.f. 1st October, 2009. Accordingly, existing approvals expiring on or after 1st October, 2009 will be deemed to have been extended in perpetuity unless specially withdrawn. However, in case of approvals expiring before 1st October, 2009, these will have to be renewed and once renewed these shall continue to be valid in perpetuity, unless specifically withdrawn." 12. The aforesaid Circular is in favour of the assessee and even if the assessee by ignorance or inadvertently filed an application for renewal, the CIT was required to decide the same in accordance with the amended provisions. As regards to the contention of the ld. D.R. that the provisions contained in section 293C of the Act enables the CIT to withdraw approval is concerned, it is noticed that the said section has been inserted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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