9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (8) TMI 1322 - AT - Income TaxCharitable Institution u/s 12A - Tax deduction on donations u/s 80G - Enquiry u/s 80G(5) - Assessee charitable institution applied for renewal of the recognition u/s 80G. CIT while examing the approval under section 80G the assessee has been denied the exemption u/s 11 12 by the Assessing Office HELD THAT - In the case of SHIKSHAN PRASARAK MANDALI. VERSUS COMMISSIONER OF INCOME-TAX. 2008 (4) TMI 396 - ITAT PUNE-A based on similar facts CIT denied recognition under section 80G for the reason that the exemption under sections 11 12 had been denied to the assessee in the assessment proceedings. As per the Bench such objection would not ipso facto militate against denial of recognition under section 80G as long as in principle and on a prima facie basis assessee complied with the conditions set out in section 80G(5)(i) to (v). Having regard to the observations of the Hon ble Gujarat High Court in the case of NN. DESAI CHARITABLE TRUST VERSUS COMMISSIONER OF INCOME-TAX 1999 (5) TMI 11 - GUJARAT HIGH COURT it is clear that in so far as the relevance of 80G(5)(i) is concerned it is to examine the eligibility of the assessee applicant to claim that its income is not liable to be included in the computation of total income. The Hon ble High Court emphasized that for the purposes of enquiry under section 80G(5) it is to be seen whether the Trust is registered u/s 12 or not. It has been specifically observed that Once a trust is registered under section 12A its income from property which includes donations whether covered under section 11(1)(d) or u/s 12 such donations are deemed to be income from property is not to be included in its total income u/s 11 or section 12. In the present case the objection raised by the CIT to deny the recognition u/s 80G is founded on irrelevant considerations by embarking upon an exercise which is only in the realm of assessment proceedings. Undeniably the assessee is registered u/s 12A and such registration continues. In this view of the matter in our view the assessee fulfils the condition prescribed under clause (i) of section 80G(5). There being no other objection raised by the CIT we therefore proceed on the basis that the assessee has fulfilled all the conditions prescribed under clauses (i) to (v) and is thus eligible for renewal of recognition u/s 80G(5) - Decision in favour of Assessee.
Issues Involved:
1. Denial of approval under section 80G of the Income-tax Act, 1961. 2. Alleged violation of section 13(1)(c) of the Income-tax Act, 1961. 3. Relevance of the assessee's registration under section 12A of the Income-tax Act, 1961. 4. Scope of enquiry under section 80G(5) of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Denial of Approval under Section 80G: The appeal was directed against the order of the Commissioner of Income-tax-I, Pune, dated 30.12.2009, which rejected the Society's application in Form No. 10G for approval under section 80G of the Income-tax Act, 1961. The assessee, an Education Society registered in April 1969, had previously been granted approval under section 80G for the period 5.1.2001 to 31.3.2004. The application for renewal dated 19.6.2009 was scrutinized, and the Commissioner raised queries regarding charitable activities, proof of filing Form No. 10 for Financial Years 2005-06 to 2007-08, and the inclusion of fees under 'income from other sources'. The Commissioner was not satisfied with the responses and rejected the application, citing a violation of section 13(1)(c) during assessment proceedings for AY 2007-08. 2. Alleged Violation of Section 13(1)(c): The Commissioner denied the approval under section 80G, stating that the assessee violated section 13(1)(c) of the Act, which led to the denial of exemption under sections 11 and 12 for AY 2007-08. The assessee argued that there was no violation of section 13(1)(c) and that the Commissioner should only prima facie appreciate the conditions prescribed in clauses (i) to (v) of section 80G(5). The assessee's appeal against the assessment order was pending before the Commissioner of Income-tax (Appeals). 3. Relevance of the Assessee's Registration under Section 12A: The assessee was registered under section 12A of the Act, effective from 5.7.2001. The Hon'ble Gujarat High Court in N. N. Desai Charitable Trust v. CIT emphasized that once a trust is registered under section 12A, its income is not to be included in its total income under sections 11 or 12. The enquiry under section 80G(5) should not go beyond verifying this registration. The actual assessment of the trust and its liability to tax are matters for assessment proceedings, not for the enquiry under section 80G. 4. Scope of Enquiry under Section 80G(5): The scope of enquiry under section 80G(5) involves verifying the fulfillment of conditions in clauses (i) to (v). The Hon'ble Gujarat High Court clarified that the Commissioner should not act as an Assessing Officer during this enquiry. The assessee's registration under section 12A should suffice to meet the condition in clause (i) of section 80G(5). The ITAT Pune found that the Commissioner's objection was based on irrelevant considerations related to assessment proceedings, not the conditions for approval under section 80G. Conclusion: The ITAT Pune concluded that the assessee fulfilled the conditions prescribed under clauses (i) to (v) of section 80G(5) of the Act. The impugned order of the Commissioner of Income-tax was set aside, and the Commissioner was directed to grant recognition to the assessee under section 80G(5) based on the application dated 19.6.2009. The appeal of the assessee was allowed, and the decision was pronounced in the open court on 30th August 2011.
|
