2011 (12) TMI 232

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....d medical/health centre. It has been registered under sec. 12A as a charitable trust. The assessee trust has been granted recognition for exemption under sec. 80G from time to time right from its inception - the first being dated 8th September, 1987 and last being dated 2.09.2008 for the period from 1.04.2008 to 31.3.2011 vide order u/s 80G(5)(vi) of the Act. As per the provisions contained in sec. 80G(5)(vi) of the Act, as they stood before 1.10.2009, the exemption under sec. 80G was to be granted for a period not exceeding five years at a time, and renewal thereafter. The assessee therefore, made an application on 17.02.2011 in Form No. 10G seeking exemption under sec. 80G of the Act for the period from 1.04.2011 i.e. after the expiry of exemption granted upto 31.03.2011vide order dated 2.09.2008. The assessee's application for renewal of exemption under sec. 80G was considered by the learned DIT(E) but he was of the view that the assessee has not been able to establish that it satisfies the conditions laid out under sec. 80G(5) of the Act. Therefore, the assessee's application for renewal of exemption under sec. 80G of the Act, has been rejected by the DIT(E) vide impugned order....

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....October, 2009 will be deemed to have been extended in perpetuity unless specifically withdrawn. The aforesaid Circular reads as under:- "29.4 Further, as per clause (vi) of sub-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 clause provides that any approval granted under this clause shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval. Due to this limitation imposed on the validity of such approvals, the approved institutions or funds have to bear the hardship of getting their approvals renewed from time to time. This is unduly burdensome for the bona fide institutions or funds and also leads to wastage of time and resources of the tax administration in renewing such approval sin a routine manner. 29.5 Therefore, the proviso to clause (vi) of sub-section (5) of Section 80G has been omitted to provide that the approval once granted shall continue to be valid in perpetuity. 29.6 Further, the commissione....

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.... of Babu Hargovind Dayal Trust v. ITAT [2011] 199 Taxman 138/10 taxmann.com. 241 (All.), where the Hon'ble High Court after considering the amendment made in sec. 80G(5)(vi) of the Act and the Board' Circular dated 3.06.2010, has observed and held as under:- "6. We have gone through the record and we find that the petitioner was granted exemption under section 80G on 8-6-2009 and the same was valid up to 31-3-2010, but in the meantime, in view of the Circular aforesaid, the amendment was made providing therein that such exemption would continue in perpetuity unless withdrawn. 7. The aforesaid Circular, in Para 28.4 itself says that the amendment aforesaid has been made applicable with effect from 1-4-2009 and will accordingly apply in relation to assessment year 2010-11 and subsequent years. In clause 29.5, the Circular says as under: "Therefore, the proviso to clause (vi) of subsection (5) of Section 80G has been omitted to provide that the approval once granted shall continue to be valid in perpetuity." Clause 29.7 of the Circular aforesaid, reads as under:- "Applicability. - This amendment has been made applicable with effect from 1st October, 2009. Accordingly, existing a....

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....re on or after 1-10-2009 will be deemed to have been extended in perpetuity unless specifically withdrawn. This itself means that the petitioner's approval/exemption granted under section 80G, which was to expire on 31-3-2010, would be deemed to have been extended in perpetuity unless specifically withdrawn. 15. Once the exemption granted stands extended in perpetuity by operation of law, merely moving an application by the petitioner would not divest it of the aforesaid right, which had accrued to it, in view of the Circular aforesaid and the amendment made in the Act. 16. In these circumstances, there is no requirement of maintaining the direction issued by the Tribunal to the Commissioner, Income-tax for deciding the application for renewal afresh, in accordance with law, as by virtue of operation of law, the exemption shall be deemed to be continued in perpetuity and it will continue, so long it is not withdrawn, as per the provisions of the Act." 7. In the light of the above discussion and relying upon the decision of Hon'ble High Court of Allahabad in the case of Babu Hargovind Dayal Trust (supra), we hold that the assessee trust's approval/exemption granted under sec. 80G....