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The Appellate Tribunal ITAT COCHIN considered an appeal by a charitable institution, Satchidananda Charitable Medical Trust, Kanhangad, against the rejection of its application for renewal of approval under section 80G(5) of the Income-tax Act, 1961. The Commissioner of Income-tax, Kannur, rejected the renewal application, citing that the trust had not complied with the provisions of section 11(2) and (5) and had a significant excess of income over expenditure. The tribunal heard arguments from the assessee's representative and the Revenue and examined the evidence provided by the trust, including corpus donations received and expenditures made for charitable purposes.
The tribunal found that the donations received by the trust were corpus donations, not regular income, and therefore should not have been included in the income of the trust. It also noted that the trust had made substantial expenditures on fixed assets for charitable purposes. The tribunal criticized the Commissioner of Income-tax for relying solely on balance-sheet figures and not considering the evidence presented by the trust and the findings of lower authorities who had conducted detailed inquiries and reported that the trust had not violated any provisions. Based on the evidence and circumstances presented, the tribunal set aside the Commissioner's order and directed the renewal of approval under section 80G(5) for the trust. The appeal filed by the assessee was allowed. This case highlights the importance of considering all evidence and conducting thorough investigations before making decisions on tax exemptions for charitable institutions.
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