In a most dreadful situation the Supreme Court in [2022] 447 ITR 766 (SC) were cornered with a question whether the Tribunal was right in law in holding that the appellant-trust is not eligible for renewal of approval under section 80G for FY 2004-05 after about 17 years.
Both the Commissioner and the Tribunal proudly rejected the application holding that only a minuscule of the income is used for charitable purposes and that the building held is merely let out outside for business purposes which is not the object of the trust.
Holding as in appropriate such rejection the Court directed the authorities to take them into account only at the time of actual assessment and certainly not at the stage of renewal as the law so provides. Poorly the Supreme Court had to read the law to the two jumbos.
Now that this clarification took 17 years somebody must pay for this inordinate delay and certainly not the charitable trust with limited means and limited knowledge of law.
Our income tax law is a complete failure today when it could not teach this basic rule of renewal which is well guided by section 80G (5) ( ii ) yet escaped attention of Commissioner and the Tribunal.