2018 (2) TMI 1375 - HC - Income Tax

Benefit of Section 80-G (5) (vi) - activities carried out would qualify as charitable activities - Held that - The record/paper book reflects that the amounts, which were expended by the assessee towards all the activities were less than ₹ 10,00,000/- and, therefore, the activities would clearly be included to be covered under the provisions of Section 2 (15) of the Act and in view of that the benefit of Section 80-G (5) (vi) would also enure to the assessee. In a recent division Bench judgement of this Court in the case of CIT vs. Shri Balaji Samaj Vikas Samiti (2018 (2) TMI 769 - ALLAHABAD HIGH COURT) a similar question arose with regard to charitable activities and this Court took a view that where the amount of less than ₹ 10,00,000/- it would get the benefit of Section 2 (15) of the Act. - Decided in favour of assessee.

Summary

Issues:
1. Whether the Tribunal was justified in directing the grant of exemption u/s 80-G to the assessee based on registration u/s 12-A?
2. Whether the Tribunal was justified in granting exemption u/s 80-G to the assessee for activities related to 'Animal Care' not falling under 'Charitable Purpose' as per Section 2(15) of the IT Act?

Analysis:
1. The appeal was filed by the department against the Tribunal's order directing exemption u/s 80-G for the assessee. The assessee, a registered Society, had obtained registration under Section 12-A but was denied exemption u/s 80-G by the CIT. The Tribunal upheld that the activities qualified as charitable under the proviso to Section 2(15), including relief of the poor, education, medical relief, etc. The Tribunal's decision was supported by the retrospective amendments introduced by Finance Acts, ensuring activities under &8377; 10,00,000 were covered under Section 2(15).

2. The Tribunal's decision granting exemption u/s 80-G for 'Animal Care' activities was challenged. However, the Court referred to a previous case where it was held that if the aggregate value of receipts is less than &8377; 10,00,000, the activities would qualify under Section 2(15). The Court found that the expenses incurred by the assessee towards animal care were below the threshold, making them eligible for exemption u/s 80-G. This decision was in line with the interpretation of the law and previous judgments.

Conclusion:
The High Court upheld the Tribunal's decision, ruling in favor of the assessee and against the revenue department. The Court found that the activities of the assessee qualified as charitable under the provisions of Section 2(15) of the IT Act, making them eligible for exemption u/s 80-G. The judgment highlighted the importance of considering the value of receipts for determining eligibility for exemption under the relevant provisions. The appeal was dismissed with no costs incurred by either party.