TMI Blog2012 (11) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. It is directed against the order passed by the Director of Income-tax (Exemptions) [DIT (E)] dated 1st 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 statement of facts and the grounds of appeal read as under:- Statement of Facts 1. Indian Plumbing Association is a society registered under the Society Registration Act. 2. The said association is registered u/s 12A of the Income Tax Act w.e.f. 01.04.2006 vide order dt. 16.08.2007. 3. The said association was also granted approval u/s 80G(5)(vi) upto 31.03.2011 vide order dt. 09.07.2008. 4. The said association applied for continuation of approval u/s 80G (5)(vi) on 31.03.2011 which has been rejected by the Director of Income Tax (Exemptions) Delhi vide order dt. 01.09.2011. Grounds of Appeal 1. The order of the ld. DIT (E) is biased, arbitrary, illegal and is against the facts of the case on record. It is prayed. (i) that the said order may kindly be cancelled and (ii) the ld. DIT (E) Delhi be directed to allow the continuation of approval granted u/s 80G(5)(vi) to the association and oblige. 2. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said order is reproduced below:- This is an appeal filed by the assessee. It is directed against the order passed by the Director of Income-tax (Exemptions) [DIT (E)] u/s 80G(5)(vi) of Income-tax Act, 1961 (the Act) read with Rule 11AA of Income-tax Rules, 1962 (the Rules). The grounds of appeal read as under:- 1. That the rejection orders passed u/s 80G(5)(vi) of the Act, are against the law and to the facts of the case. 2. That the ld. DIT (Exemptions) failed to appreciate that as per the amended provisions of law after 1st October, 09 the exemption already allowed/granted up till 31.03.10 shall be deemed to have been extended in perpetuity unless specifically withdrawn as contained in Board s Circular No.7/2010 (F.No.197/21/2010 ITA I) dated 27.10.2010. 3. That the ld. DI (Exemption) was further wrong for not appreciating that the appellant society is already registered u/s 12A(a) of the Income Tax Act, 1961, for doing charitable activities and also fulfill the conditions laid down u/s 80G(5)(vi) of the Act, and granted exemption u/s 80G for the period from 01.04.07 to 31.03.10 vide orders dated 26.04.2007. 4. That the ld. DI (Exemption) further failed to consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th and this position of law has been made clear by the CBDT vide its Circular No.7/2010 (F.No.197/21/2010- ITA-I dated 27th October, 2010). He has placed on our record a copy thereof wherein the Board has issued certain clarification with regard to period of validity of approvals inter alia including u/s 80G (5). In para 5of the said Circular it has been stated as under:- 5. As regards approvals granted upto 1-10-2009 under section 80G by the Commissioners of Income-tax/ Directors of Income-tax, proviso to section 80G(5)(vi) clarified that any approval shall have effect for such assessment year or years not exceeding five assessment years as may be specified in the approval. The above proviso was deleted by the Finance (No. 2) Act, 2009. The intent behind the deletion of above proviso as explained in the explanatory memorandum to Finance (No. 2) Bill, 2009 was as under : Further as per clause (vi) of sub-section (5) of section 80G of the Income-tax Act, 1961, the institutions or funds to which the donations are made have to be approved by the Commissioner of Income-tax in accordance with the rules prescribed in rule 11AA of the Income-tax Rules, 1962. The proviso to this cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn as per the provisions of the Act. He has also placed a copy of the said decision on our record and a copy was also given to the learned DR. Therefore, it is the case of the learned AR that directions of DIT (E) regarding rejection of renewal application filed by the assessee are not maintainable and should be vacated as the assessee by virtue of provisions of law will enjoy the approval u/s 80G in perpetuity as it has been already granted with approval which fall beyond 1st October, 2009 and is upto 31st March, 2010. 6. On the other hand, relying upon the order passed by the DIT (E), it is the case of the learned DR that the assessee s application has rightly been rejected as the assessee did not appear to substantiate its application for renewal of the approval. 7. We have heard both the parties. We have also carefully gone through the provisions of Section 80G(5). Clause (vi) of sub-section (5) of Section 80G stipulates for the non-taxability of donations received by an institution which inter alia includes charitable institution registered u/s 12 of the Act. The fundamentals of sub-section (5) of Section 80G is that 80G approval will be granted to the charitable inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver been withdrawn. What has been considered by the ld. DIT (E) in his order is the application filed by the assessee for renewal of approval which cannot in any manner be interpreted as withdrawal of approval u/s 80G. Now, the question will be that whether by mere filing the application for renewal of approval u/s 80G the assessee can be held to be not entitled for the benefit of approval u/s 80G. In our opinion, where there is no statutory obligation on the assessee to seek renewal of the approval, then, the application filed by the assessee has no meaning as the statutory provisions will prevail. The interpretation of the statutory provision as well as the aforementioned Circular issued by the CBDT clearly states that the existing approvals expiring on or after 1st October, 2009 shall be deemed to have been extended in perpetuity unless specifically withdrawn. All the authorities working under the control of CBDT are bound to follow the instructions issued by the CBDT. Therefore, it has to be held that as assessee s existing approval was expiring on or after the 1st day of October, 2009, the same shall be deemed to have been extended in perpetuity unless specifically withdrawn. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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