Commissioner Of Income Tax-I, Ludhiana v. Bhhola Bhandari Charitable Trust, Ludhiana

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 238 of 2012 (O&M) Date of decision: 30.01.2013 Commissioner of Income Tax-I, Ludhiana ...Appellant versus Bhhola Bhandari Charitable Trust, Ludhiana ..Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTAHON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. Rajesh Katoch, Advocatefor the appellant. HEMANT GUPTA, J. (Oral) The Revenue is in appeal under Section 260A of the IncomeTax Act, 1960 (for short 'the Act') against the order dated 17.05.2012passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A',Chandigarh (for short 'the Tribunal) in ITA No. 140/CHD/2012 holdingthat the approval once granted to the assessee under Section 80G(5) ofthe Act shall continue in perpetuity as per circular No. 5 dated03.06.2010 issued by Central Board of Direct Taxes (for short 'CBDT').Our attention has been drawn to circular No. 7 of 2010 issued by CBDTwherein the circular issued earlier has been clarified and reiterated. The Revenue has claimed the following substantial questions of law:- “(i) Whether on the facts and circumstances of the case,Hon'ble the ITAT was justified in setting aside the order ofCIT relying upon the assessee's version that the approvalonce granted u/s 80(G)(5) of I.T Act shall continue inperpetuity as per Circular No. 5/2010? (ii) Whether on the facts and circumstances of the case,Hon'ble the ITAT was justified in not appreciating that theCIT was well within his right to withdrawn the exemptionon finding that the activities of the trust were notcharitable even though the petition of the assessee couldnot be rejected keeping in view the guidelines asmentioned in para 5 of Circular No. 7/2010 dated27.10.2010?” The assessee was granted exemption under Section 80(G) ofthe Act being the charitable trust. Such exemption was valid up to thefinancial year 2010-11 ending 31[st] March 2011. The assesee filed anapplication for renewal of exemption on 25.04.2011 which waswithdrawn on 31.05.2011. It appears such request was withdrawn as byFinance Act No. 02 of 2009 and the Circular No. 5 of 2010, it was madeexplicit that the existing exemptions granted Section 80(G) of the Act ason 1.10.2010 would continue till perpetuity. But still the Commissioner ofIncome Tax withdrew the exemption vide order dated 05.12.2011. It issaid order which has since been set aside by the Tribunal. We find that the order of the Tribunal setting aside the order of Commissioner of Income tax is based on sound reasoning. Theasseesse had valid exemption on 1.10.2010 when the provisions ofSection 80G of the Act were amended so as to dispense the periodicrenewal of the exemptions. Such statutory provisions were clarified byCircular No. 5 of 2010 and Circular No.7 of 2010 issued by CBDT. Oncethe statute has given perpetuity to the exemptions granted underSection 80(G)(5) of the Act, the same could not be withdrawn withoutissuing show cause notice in terms of the statutory provisions in themanner prescribed by law. In view of the said fact, we do not find that any substantial question of law arises for consideration. Dismissed. (HEMANT GUPTA) JUDGE ( RITU BAHRI ) JUDGE January 30, 2013G.Arora/Vimal