2014 (5) TMI 821

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he Sunbeam Academy Educational Society". Initially the Society was imparting education upto the 8th standard and the same was increased to 12th standard from the academic year 2003-04. Considering the aims and objects of the Society, the petitioner applied and was duly granted a registration under Section 12A of the Income Tax Act (hereinafter referred to as "the Act"). The Chief Commissioner of Income Tax, by an order dated 20.12.2007, granted approval under Section 10 (23C)(vi) of the Act after being satisfied that the educational institution was existing solely for educational purpose and not for the purpose of profit. This approval by the order dated 20.12.2007 was granted for the assessment year 2005-06 to 2007-08, i.e., for a period ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ax under Section 80G(5) of the Income Tax Act, 1961. The CBDT noticed that various field authorities were interpreting the provision relating to the period of above approval in a different manner and, consequently, for removal of doubt, the CBDT issued various instructions. In so far as Clause (vi) of Section 10(23-C) of the Act is concerned, the CBDT issued the following directions:- "4. Approvals under Sub-Clauses (vi) and (via) of Section 10(23C) are governed by the procedure contained in Rule 2CA. Rule 2CA was amended w.e.f. 1.12.2006, inter alia by substitution of the existing sub-rule 3 by a new provision which is reproduced below:- "(3) The approval of the Central Board of Direct Taxes or Chief Commissioner or Director General, as....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... [or is approved by the prescribed authority, as the case may be,] or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), is approved by the prescribed authority and subsequently that Government or the prescribed authority is satisfied that- (i) such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not- (A) applied its income in accordance with the provisions contained in clause (a) of the third proviso; or (B) invested or deposited its funds in accordance with the provisions contained in clause (b) of the third proviso; or (ii) the activities of such fun....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nt application, inasmuch as, there was no requirement to apply for extension of the approval inasmuch as the approval in the case of the petitioner was granted after 1.12.2006 on 20.12.2007. The approval so granted by the Chief Commissioner of Income Tax, by an order dated 20.12.2007, was a one time affair, which was to continue till it was withdrawn under the proviso as extracted above. Consequently, the impugned order dated 17.3.2009 was otiose having no effect in law. The impugned order only rejects the application for extension of the approval for the assessment years 2008-09, 2009-10 and 2010-11. The original order of approval dated 20.12.2007 still continues to remain in force inspite of the rejection of the petitioner's applicati....