Charitable trust: Certificate u/s. 80G(5): Amendment by Finance Act (No.2) of 2009 and Circular Nos. 5 and 7 of 2010 issued by CBDT: Certificate once granted operates in perpetuity: Withdrawal, if any, should be as per the procedure:

The assessee, a charitable trust was granted certificate u/s. 80G(5), which was valid upto the F.Y. 2010-11 ending 31-03-2011. The assessee filed an application for renewal on 25-04-2011 which was withdrawn on 30-05-2011 in view of the amendment by Finance Act (No. 2) of 2009 and Circular Nos. 5 of 2010 and 7 of 2010 wherein it was stated that the Certificate granted u/s. 80G(5) which is existing on 01-10-2010 would continue till perpetuity unless it is withdrawn as per law. However, CIT passed order dated 05-12-2011 withdrawing the certificate. The Tribunal set aside the said order.

On appeal by the Revenue, the Punjab and Haryana High Court upheld the decision of the Tribunal and held as under:

“i) We find that the order of the Tribunal setting aside the order of CIT is based on sound reasoning. The assessee had valid exemption on 01-10-201, when the provisions of section 80G of the Act were amended so as to dispense with the periodic renewal of the exemptions. Such statutory provisions were clarified by Circular No. 5 of 2010 and Circular No. 7 of 2010 issued by the CBDT. Once the statute has given perpetuity to the exemptions granted u/s. 80G(5) of the Act, the same could not be withdrawn without issuing show cause notice in terms of the statutory provisions in the manner prescribed by law.

ii) In view of the said fact, we do not find that any substantial question of law arises for consideration.”