Appeal allowed, sec. 80G(5)(vi) exemption upheld in perpetuity. Tribunal emphasizes approval's perpetual nature.

The appeal was allowed, and the exemption under sec. 80G(5)(vi) of the Income-tax Act was directed to be allowed, confirming the continuation of the exemption granted to the assessee in perpetuity unless withdrawn by the competent authority. The Tribunal set aside the order rejecting the application for exemption and emphasized the perpetual nature of the approval once granted under the Act, despite the omission of the Proviso to sec. 80G(5)(vi) by the Finance (No.2) Act, 2009.

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Issues:
- Rejection of application for exemption under sec. 80G of the Income-tax Act, 1961.
- Barred by limitation as per Rule 11AA(6) of the Income-tax Rules.
- Effect of omission of Proviso to sec. 80G(5)(vi) of the Act.
- Continuation of exemption in perpetuity post the omission of the Proviso.

Analysis:

The appeal was filed against the order of the Director of Income-tax (Exemptions) rejecting the application of the assessee trust seeking exemption under sec. 80G of the Income-tax Act, 1961. The assessee was granted exemption under sec. 80G(5)(vi) of the Act, valid from 1st April, 2007 to 31st March, 2010. The application for renewal of exemption was filed on 30th March, 2010. The issue of the order being barred by limitation as per Rule 11AA(6) was raised but not pressed further during the hearing. The order of the learned DIT(E) was undated, mentioning the date of the application as 30th March, 2011, which was in dispute.

The Finance (No.2) Act, 2009 omitted the Proviso to sec. 80G(5)(vi) of the Act, which previously limited the approval period to five assessment years. The CBDT Circulars clarified that approvals granted before 1st October, 2009, needed renewal, but once renewed, they would continue in perpetuity unless withdrawn. The approval once granted under sec. 80G(5)(vi) of the Act was to continue indefinitely, even if the renewal application was filed after 1st October, 2009. The Tribunal set aside the order of the learned DIT(E) and directed the allowance of exemption under sec. 80G(5)(vi) of the Act, confirming the continuation of the exemption granted to the assessee in perpetuity unless withdrawn by the competent authority.

In conclusion, the appeal filed by the assessee was allowed, and the exemption under sec. 80G(5)(vi) of the Act was directed to be allowed, emphasizing the perpetual nature of the approval once granted under the Act. The judgment clarified the impact of the omission of the Proviso and the continuous validity of exemptions granted under the specified section.

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