TaxTMI 
TaxTMI 
2012 (6) TMI 515
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....assessee for being a Charitable Trust u/s 80G of Income Tax Act, 1961. 3. That the learned CIT-I, Ludhiana has erred in law and on facts in withdrawal of exemption u/s 80G without fulfilling the requirements of the law such as issuance of show cause notice, compliance of circular dated 27-10-2010 etc. 4. That the learned CIT-I, Ludhiana has erred in law and on facts by withdrawal of exemption granted u/s BOG on rejecting the amendment in the trust after the lapse of 9 years on the basis of which the exemption was granted to the assessee. 5. That the submissions made during the course of hearing have not been considered by the Commissioner of Income Tax-l, Ludhiana at all and has withdrawn the exemption U/S 80G merely on the basis of conjectures and surmises. 6. That the learned CIT-I, Ludhiana has erred in law and on facts by not considering the facts that the trust deed has appointed the independent trustees and trustees have contributed the corpus in the Trust by way of moveable property and unilaterally withdrawal the exemption. 7. That the appellant craves leave to add or amend any grounds of appeal befo....
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....etail, why there would be problems in carrying out the genuine charitable activities. This has been discussed in detail in paras, 5, 6, 7, 8, 9,10 and 11. Hence, exemption u/s 80G(5) of the Income-tax Act, 1961 cannot be allowed to the applicant Trust and Application is hereby rejected.' 6. Now the assessee is in appeal before the Tribunal. Shri Sudhir Sehgal, Ld. Counsel for the assessee submitted that earlier as per provisions contained in clause (vi) to sub-section (5) of Section 80G, the approval was to be granted by the CIT in accordance with rules prescribed in Rule 11AA and as per the proviso to Section 80G(5)(vi), the approval was to be renewed from time to time. However, considering the hardship, the Legislature in all its wisdom has sought to omit this proviso on 1st October, 2009. Therefore, now approval once granted shall be continue to be valid in perpetuity. In the instant case, the approval was granted by the CIT upto 31.3.2011, therefore, in view of the aforesaid omission of the proviso to Section. 80G(5)(vi), the approval once granted shall continue to be valid in perpetuity. He further submitted that even if the assessee by ignorance or inadvertently filed an a....
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.... the approval was granted to the assessee up to 31-3-2010, therefore, in view of the aforesaid omission of the proviso to section 80G(5)(vi) of the Act vide Finance (No. 2) Act, 2009, the approval once granted shall continue to be valid in perpetuity. The memo explaining the provisions in Finance (No. 2) Bill, 2009 as reported in 314 ITR 193 (St.) at page 194 reads as under :- "This amendment will take effect from 1st day of April, 2009 and shall accordingly, apply in relation to assessment year 2009-10 only. 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 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. Th....
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....n section 293C read as under :- "293C. Where the Central Government or the Board or an income-tax authority, who has been conferred upon the power under any provision of this Act to grant any approval to any assessee, the Central Government or the Board or such authority may, notwithstanding that a provision to withdraw such approval has not been specifically provided for in such provision, withdraw such approval at any time : Provided that the Central Government or Board or income-tax authority shall, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the assessee concerned, at anytime, withdraw the approval after recording the reasons for doing so." 13. From the proviso attached to the section 293C of the Act, it is crystal clear that even if any Income-tax Authority wants to withdraw approval, he shall issue a show-cause notice against the proposed withdrawal to the assessee concerned and after giving a reasonable opportunity of being heard shall withdraw approval after recording reasons for doing so. The use of the word "shall" in the aforesaid proviso makes it mandatory for Commissioner of Income-tax to issue a show-cause notice ....