The court emphasized that the CIT's power to grant or deny approval under Section 80G is coupled with a duty and should not be based on irrelevant considerations.

D.K.Jain, J.

1. Rule DB.

2. With the consent of learned counsel for the parties, we take up the matter for final disposal at this stage itself.

3. The petitioner is aggrieved by order dt. 8th July, 2002, passed by the CIT, Rohtak, whereby its application dt. 16th Jan., 2002, seeking renewal of exemption under Section 80G of the IT Act, 1961 (for short, the Act), has been rejected.

4. The petitioner, a society registered under the Societies Registration Act, 1860, was incorporated on 22nd Feb., 1961, with the avowed objects of establishing educational institutions anywhere in India, to contribute funds to any existing or future educational institutions, universities or gurukuls and to acquire property of every description for any one or some of its objects, etc. However, subsequently in the general body meeting of the society held on 17th Sept., 1989, the memorandum and articles of the society containing the objects, were rearranged with the following new objects :

"(a) To spread the technical and professional education in addition to basic education. To arrange for the higher education without any difference of caste, colour and creed. To start new institution of different types for education in future. (b) To build hospital and health related institutions where physical and mental patients can be treated, to arrange for housing for patients during illness where doctors, nurses, pharmacists, compounders can be trained, and to provide facilities for the family welfare.

(c) To conduct any type of work which is of charitable and public interest, without any religious, caste and creed, communal or discrimination in regard to male/female."

5. On deletion of Section 10(22) of the Act, vide its application dt. 16th March, 1999, the petitioner applied for registration under Section 10(23C) of the Act. The registration was granted for the asst. yr. 1999-2000 by the CBDT. Again on 5th Oct., 2000, the petitioner applied for registration under the said section, which is stated to be still pending. Simultaneously, vide its application dt. 16th March, 1999, the petitioner applied for approval under Section 80G of the Act.

6. It is pleaded that the petitioner-society had been filing IT returns regularly for the past 3 years declaring nil taxable income, the excess of income over expenditure being exempt under Section 10(23C)(vi) and (via) of the Act and was also registered under Section 12A of the Act for getting the exemption of its income under Sections 11 and 12 of the Act. The stand of the petitioner is that its income was exempt under Section 10(22A) of the Act because it was running educational institutions as well as a hospital solely for the educational purposes and not for the purposes of profit. However, w.e.f. 1st April, 1999, the new provisions of Section 10(23C)(vi) and (via) read with Rules 2BC and 2CA of the IT Rules, 1962 (for short, the Rules), were introduced, whereunder necessary approval of the educational institution or the institution running a hospital had to be taken from the prescribed authority, namely, the Chief CIT. Since the petitioner was having annual receipt of more than rupees one crore, it applied for registration under Rule 2CA(iii) on 5th Oct., 2000, but the same is still pending. The petitioner also made an application for grant of approval under Section 80G(5)(vi) of the Act, which was inserted in the statute book w.e.f. 1st Oct., 1991. The petitioner was granted the said approval from 1991 to 1994. The approval was again granted from 1st April, 1994 to 31st March, 1999. It is pleaded that even prior to 1st Oct., 1991, the petitioner-society had been regularly allowed exemption under Section 80G of the Act, though the same was not required under the statute. As noted above, vide its application dt. 16th March, 1999, the petitioner again applied for approval, which should have been otherwise valid for 5 years, i.e., 31st March, 2004, but having failed to get any response, the petitioner again appl