Commissioner Of Income Tax-I, Ludhiana v. Shri Vishav Namdhari Sangat, Ludhiana

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 239 of 2012 (O&M) Date of decision: 30.01.2013 Commissioner of Income Tax-I, Ludhiana ...Appellant versus Shri Vishav Namdhari Sangat, 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 theIncome Tax Act, 1960 (for short 'the Act') against the order dated17.05.2012 passed by the Income Tax Appellate Tribunal,Chandigarh Bench 'A', Chandigarh (for short 'the Tribunal) in ITANo. 805/CHD/2011 holding that the approval once granted to theassessee under Section 80G(5) of the Act shall continue inperpetuity as per circular No. 5 dated 03.06.2010 issued byCentral Board of Direct Taxes (for short 'CBDT'). Our attention hasbeen drawn to circular No. 7 of 2010 issued by CBDT wherein thecircular issued earlier has been clarified and reiterated. The Revenue has claimed the following substantialquestions of law:- “(i) Whether on the facts and circumstances of thecase, Hon'ble the ITAT was justified in setting asidethe order of CIT relying upon the assessee's versionthat the approval once granted u/s 80(G)(5) of I.T Actshall continue in perpetuity as per Circular No.5/2010? (ii) Whether on the facts and circumstances of thecase, Hon'ble the ITAT was justified in notappreciating that the CIT was well within his right towithdrawn the exemption on finding that theactivities of the trust were not charitable eventhough the petition of the assessee could not berejected keeping in view the guidelines as mentionedin para 5 of Circular No. 7/2010 dated 27.10.2010?” The assessee was granted exemption under Section80(G) of the Act being the charitable trust. Such exemption wasvalid up to 31[st] March 2010. The assesee filed an application forrenewal of exemption on 27.12.2010 which was withdrawn on04.02.2011. It appears such request was withdrawn as by FinanceAct No. 02 of 2009 and the Circular No. 5 of 2010, it was madeexplicit that the existing exemptions granted Section 80(G) of theAct as on 1.10.2010 would continue till perpetuity. But still theCommissioner of Income Tax withdrew the exemption vide orderdated 16.06.2011. It is said order which has since been set asideby the Tribunal. We find that the order of the Tribunal setting aside theorder of Commissioner of Income tax is based on soundreasoning. The asseesse had valid exemption on 1.10.2010 whenthe provisions of Section 80G of the Act were amended so as todispense the periodic renewal of the exemptions. Such statutoryprovisions were clarified by Circular No. 5 of 2010 and CircularNo.7 of 2010 issued by CBDT. Once the statute has givenperpetuity to the exemptions granted under Section 80(G)(5) ofthe Act, the same could not be withdrawn without issuing showcause notice in terms of the statutory provisions in the mannerprescribed by law. In view of the said fact, we do not find that anysubstantial question of law arises for consideration.Dismissed. (HEMANT GUPTA) JUDGE January 30, 2013G.Arora ( RITU BAHRI ) JUDGE