2014 (7) TMI 207 - AT - Income Tax

Application for grant of certificate u/s 80G of the Act No charitable activity from last three years Held that - The assessee has been recognised as charitable trust u/s 12A by the Department assessee contended that it has not received the donation during the period; therefore, no such charitable activity could be carried out - The conditions for granting of approval of section 80G, has been provided in sub section 5 of section 80G - If these conditions are not fulfilled, then the approval cannot be granted - though the reason given by the DIT(E) for rejecting the approval u/s 80G, is quite an appreciable ground, however, he is also required to see whether the conditions given in sub section 5 of section 80G, has been fulfilled or not - DIT(E) has also not examined the assessee s contention that it has carried out the charitable activities from the financial year 2010 11, wherein it has received the donation and also utilised it for the medical aid thus, the matter is liable to be remitted back to the DIT(E) for fresh examination in accordance with the conditions laid down in sub section 5 of section 80G Decided partly in favour of Assessee.

Summary

Issues:
1. Rejection of application for grant of certificate under section 80G of the Income Tax Act, 1961 based on lack of charitable activities.
2. Interpretation of conditions for granting approval under section 80G.
3. Requirement to fulfill conditions under sub-section 5 of section 80G for approval.
4. Consideration of charitable activities carried out by the trust from a specific financial year.

Analysis:
The judgment pertains to an appeal challenging the rejection of an application for a certificate under section 80G of the Income Tax Act, 1961 by the Director of Income Tax (Exemption) [DIT(E)], Mumbai. The appellant, a trust formed in 1994, had applied for the certificate but was denied based on the lack of charitable activities and expenditure in the past three years. The DIT(E) emphasized the importance of carrying out charitable activities to qualify for approval under section 80G, citing relevant case laws. The appellant argued financial difficulties and lack of donations as reasons for the inactivity during the specified period. However, they demonstrated charitable activities and donations from the financial year 2010-11 onwards.

Upon review, the tribunal acknowledged the DIT(E)'s rationale for rejecting the approval due to the absence of charitable activities. Still, it emphasized the need to assess whether the conditions outlined in sub-section 5 of section 80G were met. The tribunal noted that the DIT(E) had not thoroughly examined the appellant's claim of engaging in charitable activities from 2010-11 onwards, utilizing donations for medical aid. Consequently, the tribunal decided to remand the matter back to the DIT(E) for a fresh review, instructing a detailed assessment based on the conditions specified in sub-section 5 of section 80G and granting the appellant a fair hearing opportunity.

In conclusion, the tribunal partially allowed the appellant's appeal for statistical purposes, directing the DIT(E) to reevaluate the application in line with the statutory conditions and the appellant's submissions regarding charitable activities and donations, ensuring a comprehensive review process.