Regarding Sec 80G sec 5 clause (vi) was omitted by the Finance Act 2009 w e f 1st Oct 2009 for renewal application

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
We have heard the rival contentions and gone through the facts and circumstances of the case. The brief facts are that the assessee is a charitable Institution registered under section 12AA of the Act by DIT(Exemption), Kolkata vide order dated 30.06.2004. According to assessee, the Institution has been carrying on charitable activities like organizing eye operation camps and providing eye glasses and other connected services with the treatment of eyes in rural areas. According to assessee, the Institution has also been conducting mass community marriages in rural areas and also giving financial help to poor for marriages. The assessee stated the fact that certificate of exempt deduction under section 80G(5)(vi) dated 30.06.2004 was issued by DIT(Exemption), Kolkata for a period from 03.12.2003 to 31.03.2005. The certificate of exemption was renewed further by order dated 19.10.2005 of DIT(Exemption), Kolkata for a further period from 01.04.2006 to 31.03.2010. The assessee filed application dated 15.03.2010 for further renewal in Form No. 10G under section 80G(5)(vi) of the Act and DIT (Exemption) without a speaking order and even though there was change in renewal provision that the exemption is to be granted in perpetuity, rejected the application. We find that section 80G(5)(vi) of the Act contained a proviso which reads as “Provided that any approval shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval”. Further, considering the hardship of the said proviso, legislature omitted this proviso by the Finance (No.2) Act, 2009 w.e.f. 01.10.2009, but in this case, approval was granted upto 31.03.2010. Therefore, in view of the aforesaid omission of the said proviso, the exemption granted to assessee upto 31.03.2010 continued to be valid thereafter. This position has been explained by the CBDT Circular No. 5 explaining the provisions of Finance (No. 2) Act, 2009 in para 29.7 of the Circular, which reads as under :- “This amendment has been made applicable with effect from 1st October, 2009. Accordingly, existing approvals expiring on or after 1st October, 2009 will be deemed to have been extended in perpetuity unless specifically withdrawn. However, in case of approvals expiring before 1st October, 2009, these will have to be renewed and once renewed these shall continue to be valid in perpetuity, unless specifically withdrawn”.

Citation :
Lions Club of Calcutta Hastings, Kolkata(PAN : AAATL 4316 J)(Appellant)Vs Director of Income Tax (Exemption),Kolkata (Respondent)