- (1.) We have heard Shri Dhananjay Awasthi for the income tax department. Shri Ashish Bansal appears for the respondent assessee. This income tax appeal under Section 260A of the Income Tax Act is directed against the order of the Income Tax Appellate Tribunal dated 31.12.2007 by which it has set aside the order of the Commissioner of Income Tax, rejecting the application for renewal of the respondent assessee for exemption under Section 80G of the Income Tax Act, 1961 (the Act).
(2.) In the year 2004 the respondent assessee was in the process of establishing an eye hospital, and was enjoying the exemption under Section 80G. It applied for renewal of the exemption, which was rejected by the Commissioner of Income Tax-1, Kanpur on 19.9.2007 on the ground that the grant given by the State Government of Rs. 75.12 lacs, for specific purpose namely for purchase of equipments was not utilised within the time stipulated by the State Government i.e. upto 31.12.2004. The grant was kept in a fixed deposit in the Union Bank of India. The respondent assessee was utilising the interest of the grant and thus since the condition under Section 80G(5)(i) of the Act were not fulfilled, the application for renewal was liable to be rejected. The CIT-1, Kanpur rejected the application for renewal.
(3.) In the appeal filed by the assessee the Tribunal has found that the assessee received a sum of Rs. 75,12,043/- from the Government of U.P. during the year 1997-98 for purchase of specific equipments with the condition that the equivalent amount will have to be spent by the hospital from out of its own funds. The assessee could not utilise the fund during the year and requested for extension of time. The extension was granted by the State Government for the period up to 31.12.2004. The Tribunal found that the application of assessee for further extension of time is pending with the State Government. A dispute between assessee, regarding the borrowings from the banks was pending in the civil court in which an order was passed by the Addl. District Judge directing the petitioner to enter into an agreement for loan and for equitable mortgage of the property with a nationalised bank or government owned financial institution. The petitioner was required to furnish details of such agreement and the statement of loan received and expenditure made by the petitioner and also repayment of loan was required to be furnished to the Court.;