2023 (6) TMI 973 - AT - Income Tax

Approval u/s 80G - Charitable activity u/s 2(15) - denial of approval real purpose of the trust does not get established - HELD THAT - Appellant failed to establish the real purpose of the trust and the receipts and the expenses shown in the bank statement remained uncorroborated and the Appellant has not provided the financial statement for the year ending 31st March, 2018. Assessee has also failed to appear before us to support his case and failed to submit any material, thus, we find no reason to interfere with the findings and the conclusion of the CIT(E), we find no merit of the assessee. Grounds of Appeal of the assessee are dismissed.

Summary

Issues Involved:
The appeal filed by the assessee against the order passed by the CIT (Exemption)-Chandigarh for assessment year 2018-19 regarding the approval u/s 80G, consideration of trust activities, verification of gross receipts and expenses, and dismissal of application based on uncorroborated documents.

Approval u/s 80G:
The CIT(E) rejected the application filed by the appellant trust for approval u/s 80G of the Income Tax Act, 1961, on the grounds that the real purpose of the trust was not established. The CIT(E) observed that the activities mentioned by the trust were not in sync with the stated objects and lacked systematic basis. The bank statements provided by the trust did not corroborate the donations received and expenses claimed. Despite various objects mentioned in the trust deed, the claimed activities were considered insufficient for approval u/s 80G. The failure to furnish financial statements for the relevant year further weakened the case for approval.

Trust Activities Consideration:
The CIT(E) noted that the trust activities, such as celebrating festivals and organizing medical camps, were not consistent with the main objects of the trust. The lack of systematic activities in line with the stated objects raised concerns regarding the eligibility for approval u/s 80G. The CIT(E) emphasized the importance of financial statements and bank statements to support claimed activities, highlighting that mere submission of documents was not adequate for approval.

Verification of Gross Receipts and Expenses:
The appellant trust failed to provide financial statements for the year ending 31st March, 2018, leading to uncorroborated receipts and expenses shown in the bank statements. The CIT(E) pointed out discrepancies in the amounts credited and debited through the bank, indicating a lack of proper documentation to support the financial transactions. The absence of financial statements for the subsequent year further weakened the trust's case for approval u/s 80G.

Dismissal of Application:
Despite the absence of the assessee and their representative during the proceedings, the Tribunal decided to consider the matter based on the material on record. The Ld. Departmental Representative highlighted the uncorroborated nature of the trust's financial transactions and the failure to establish the real purpose of the trust. Consequently, the Tribunal upheld the decision of the CIT(E) to dismiss the application, as the trust did not provide sufficient evidence to support their case. The grounds of appeal raised by the assessee were deemed without merit, leading to the dismissal of the appeal.