2014 (8) TMI 942 - AT - Income Tax

Disallowance under section 80G(5)(vi) of the Income-tax Act, 1961 - Held that - As per the provisions of section 80G(5), approval is to be allowed under section 80G(5)(vi) to the donation made after March 31, 1992 if the institution or firm is approved by the Commissioner of Income-tax in accordance with the rules made in this behalf. We find that there is no such provision that the approval under section 80G(5)(vi) should be allowed in respect of one particular donation. Since the Commissioner of Income-tax has granted approval to the assessee in respect of grant from the Union Bank of India for the purpose of braille printing machine, it has to be accepted that even as per the Commissioner of Income-tax, the assessee is satisfying all the conditions. Hence, we modify the order of the Commissioner of Income- tax and hold that such approval should be read as approval in respect of all donations for charitable purposes with effect from April 1, 2013 and not for only donation for the specific purposes noted by the Commissioner of Income-tax in para 2 of his order. The order of the Commissioner of Income-tax stands modified to this extent. - Decided in favour of assessee.

Summary

Issues:
1. Appeal against order passed under section 80G(5)(vi) of the Income-tax Act, 1961.

Analysis:
The appellant appealed against the order passed by the Commissioner of Income-tax under section 80G(5)(vi) of the Income-tax Act, 1961. The grounds raised by the appellant primarily focused on the partial approval granted by the Commissioner for a specific purpose, arguing that the application for approval was in accordance with the provisions of the Act and Rules, and no discrepancy was found. The appellant contended that the approval should have been granted in full and not restricted to a specific purpose. The appellant also argued that there is no provision in the Act for granting partial or conditional approval under section 80G, and any order contrary to granting complete approval would be against the spirit of the statute.

The authorized representative for the assessee submitted that there is no provision in the Act for allowing approval for a particular receipt or activity under section 80G(5). On the other hand, the Departmental representative supported the order of the Commissioner of Income-tax. Upon considering the submissions, the Tribunal noted that approval under section 80G(5)(vi) is granted for donations made to approved institutions or firms. The Tribunal observed that there is no provision restricting approval to a specific donation and that the approval granted for a particular purpose implies that all conditions are satisfied. Consequently, the Tribunal modified the Commissioner's order, holding that the approval should be considered valid for all donations for charitable purposes from a specified date, not just for the specific purpose noted in the original order.

In conclusion, the Tribunal allowed the appeal of the assessee, modifying the Commissioner's order to extend the approval to all charitable donations from a specified date. This judgment clarifies the interpretation of section 80G(5)(vi) and emphasizes that approval should not be limited to specific purposes when all conditions are met, ensuring a broader application of the approval granted under the Act.