| Approval once granted under sec. 80G(5)(vi) of the Income Tax Act, 1961 shall continue in perpetuity unless and until the competent authority takes appropriate action in accordance with law to withdraw the same. | ||||||
| M/S. DELHI BLUE POTTERY TRUST, VS. DIRECTOR OF INCOME-TAX (EXEMPTIONS), DELHI in I.T.A.No.4368/Del/2011 Delhi Bench, dated 2/11/2012 | ||||||
| Decided in favour of: Assessee | ||||||
| Issue Involved: The issue involved is as to whether after the omission of Proviso to sec. 80G(5)(vi) of the Act by the Finance (No.2) Act, 2009 with effect from 1st October, 2009, the approval granted under sec. 80G(5)(vi) of the Act shall continue in perpetuity unless and until the competent authority takes appropriate action in accordance with law to withdraw the same or not. | ||||||
| In favour of Assessee. | ||||||
| Relevant facts of the case : The assessee is a trust registered under sec. 12A of the Act and was also granted exemption under sec. 80G(5)(vi) of the Act vide certificate dated 14th August, 2007, valid from 1st April, 2007 to 31st March, 2010. Assessee filed application in Form No.10G before the DIT(E) for renewal of exemption under sec. 80G of the Act. | ||||||
| Hon’ble ITAT (Delhi) allowed the appeal of the assessee and directed the DIT(E) to allow exemption under sec. 80G(5)(vi) of the Act. Hon’ble Bench held that the Finance (No.2) Act, 2009 with effect from 1st October, 2009 has omitted the Proviso to sec. 80G(5)(vi) of the Act (which provided that any approval granted u/s 80G(5)(vi) shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval). Therefore, the approval once granted under sec. 80G(5)(vi) of the Act shall continue in perpetuity unless and until the competent authority takes appropriate action in accordance with law to withdraw the same. Even if the assessee moved an application for seeking renewal of exemption under sec. 80G(5) of the Act after 1st October, 2009, the learned DIT(E) is to dispose of the application in accordance with the amended provisions. Hon’ble Bench relied on CBDT Circular No.5 explaining the provisions of Finance (No.2) Act, 2009, Para 29.7 and CBDT Circular No.7 dated 27th October, 2010, relevant Para 5. |
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| Denial of exemption u/s 10(23C)(vi) of the Income Tax Act, 1961 cannot be made the sole basis for cancellation of Registration granted under Section 12A of the Income Tax Act, 1961. | ||||||
| CIT VS. M/S. JEEVAN DEEP CHARITABLE TRUST in ITA No. 471/2011 dated 29/10/2012 (Allahabad HC) | ||||||
| Decided in favour of: Assessee | ||||||
| Issue Involved: The issue involved is as to whether registration granted under Section 12A of the Income Tax Act, 1961 can be cancelled by solely relying on the order passed by Chief Commissioner Income Tax denying exemption under Section 10(23C)(vi) of the Act, 1961? | ||||||
| Relevant facts of the case : The assessee was granted registration under Section 12A of the Income Tax Act, 1961, being a charitable institution. Assessee claimed exemption u/s 10(23C)(vi) of the Act which was disallowed by the CCIT, Varanasi vide order dated 25.02.2009 on the ground that in the objects of the institution there are certain other objects, which proves that the institution has not solely been established for educational purposes. Relying on the said order, proceedings under Section 12AA(3) of the Act were initiated and vide order dated 12th October, 2009, the Commissioner of Income Tax, Varanasi cancelled the registration granted to the respondent-assessee under Section 12A of the Act. | ||||||
| Hon’ble Allahabad High Court confirmed the order passed by Hon’ble Tribunal and held that the proceedings under Section 10(23C)(vi) of the Act are independent proceedings and cannot be made the sole ground for cancellation of the registration granted under Section 12A of the Act. Assessee can claim exemption under Section 10(23C)(vi) of the Act without even applying for registration under Section 12A of the Act as it is not required to fulfill the conditions mentioned u/s 11 of the Act while claiming exemption under Section 10(23C) (vi) of the Act. Further, in the order passed by the CIT, there is no whisper that the assessee has not fulfilled any of the conditions of the Section 11 of the Act for claiming it to be a charitable institution. He had solely relied on the order of the CCIT passed under Section 10(23C)(vi) of the Act while denying the exemption under the aforesaid sub-section. Therefore, the Tribunal has rightly restored the registration granted to the assessee. | ||||||
| RBI Updates | ||||||
| Trade credits for import into India | ||||||
| The Indian companies are allowed to take short term credits up to a limit of USD 20 million per import transaction within the slab of 1 to 3 years. | ||||||
| On 11th September, 2012, the Reserve Bank of India issued circular giving privilege to the Indian Companies under the Infrastructure sector to avail the trade credit for a period of five years but upto maximum amount of USD 20 million subject to the condition that trade credit must be ab initio contracted for a period not less than fifteen months and should not be in the nature of short-term rollovers. But the AD is not permitted to issue letter of credit/guarantee/Letter of Undertaking (LoU)/ Letter of Comfort (LoC) in favor of overseas supplier, bank and financial institution for the extended period beyond three years. | ||||||
| The above condition of ab initio contract for a period not less than 15 months has been relaxed to 6 months Vide A.P. (DIR Series) Circular No. 59 dated 14th December, 2012 for existing trade credits. For future trade credits period of 15 months is still applicable. | ||||||
| Review of all-in cost ceiling for Trade Credits for import into India and for External Commercial Borrowings | ||||||
| Applicability of reviewed All-in-cost ceiling for Trade credit and ECB has been extended from 30th March, 2012 to 31st March, 2013. Reviewed all-in-cost ceiling is given as under. | ||||||
| All-in-cost ceiling for Trade Credits: | ||||||
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| All-in-cost ceiling for ECB: | ||||||
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