2023 (10) TMI 1414 - AT - Income Tax

Denial of approval u/s.80G filed u/s.10AB - assessee has not furnished the details regarding share transaction and the documentary evidences of the charitable activity carried out by the assessee - HELD THAT - The assessee is carrying out charitable activities which are not in dispute and it has also been granted registration u/s.12A as providing social welfare services. From the bare perusal of these documents it is seen that assessee has given donations for various charitable activities and to students for their scholarships and other aids and it is seen that it is genuinely carrying out its activities towards charitable objects. Therefore, it cannot be said that assessee has not filed any evidences for the charitable activities carried out by it. Apart from that, in so far as allegation that assessee has not submitted the details of share transaction is also incorrect, because as pointed out by the ld. Counsel equity shares of Valiant Organics Ltd. were sold and the assessee company / trust has received the shares in the form of donation and the copy of share donation letter has also been placed before us. The entire details of the shares sold and received by the company towards its corpus for carrying out charitable activities is evident from the record. Thus there is nothing adverse on this point. Thus the order of the ld. CIT (A) is set aside and approval u/s.80G of the Income Tax is granted to the assessee. Assessee appeal allowed.

Summary

Issues:
1. Rejection of support for approval u/s.80G filed u/s.10AB by the ld. CIT (A) (Exemptions), Mumbai.

Analysis:
The Appellate Tribunal ITAT Mumbai heard an appeal filed by the assessee against the rejection of support for approval under section 80G filed under section 10AB by the ld. CIT (A) (Exemptions), Mumbai. The assessee, a company registered under the Companies Act 2013 and granted registration under section 12A for charitable activities, applied for approval under section 80G. The initial provisional approval was granted on 15/10/2021, followed by a subsequent application on 24/08/2022. The ld. CIT issued a notice under section 80G (5)(iii) of the Act on 30/01/2023, seeking details of share transactions and documentary evidence of charitable activities. The ld. CIT rejected the application citing lack of proof of the genuineness of the trust's activities.

The ld. Counsel for the assessee contended that all necessary details and documentary evidence were submitted electronically and physically, including explanations of share transactions treated as corpus for charitable activities. Voluminous evidence of charitable activities was provided, along with proofs of donations made. The ld. CIT was accused of wrongly rejecting the application. The ld. DR suggested re-examining the documents. The Tribunal found the ld. CIT's rejection unjustified, as the charitable activities were genuine, and the required conditions under section 80G were met. Detailed evidence of charitable activities and share transactions was presented, supporting the genuineness of the trust's operations. Consequently, the Tribunal set aside the ld. CIT's order and granted approval under section 80G to the assessee.

In conclusion, the appeal of the assessee was allowed, and the order was pronounced on 18th October 2023.