2019 (1) TMI 159 - HC - Income Tax

Charitable activities - renewal of approval u/s 80G denied - trust is carrying on charitable activities for running a home for Orphans and Widows without producing a certificate issued by the Orphanages and other Charitable Homes (Supervision and Control) Act, 1960 - Held that - There was no material to show that the trust was not carrying on charitable activity and the renewal application was rejected on the ground that the registration has not been obtained on the Provisions of The Orphanages and Other Charitable Homes (Supervision and Control) Act, 1960. Merely because registration was not obtained into the Act will hipsofacto resulting in conclusion that assessee is not continuing charitable activity. Therefore, we find no error in the order passed by the Tribunal. The appeal filed by the Revenue is dismissed

Summary

Issues:
1. Validity of holding charitable activities without a certificate under the Orphanages and Other Charitable Homes (Supervision and Control) Act, 1960.

Analysis:
The Tax Case Appeal was filed against the order of the Income Tax Appellate Tribunal 'B' Bench, Chennai, regarding the renewal of approval under Section 80G of the Income Tax Act, 1961. The main question of law was whether the trust was justified in carrying out charitable activities for a home for Orphans and Widows without possessing a certificate issued under the Orphanages and Other Charitable Homes (Supervision and Control) Act, 1960. The Commissioner of Income Tax I, Madurai, had rejected the renewal application, but the Tribunal allowed the appeal. The trust had obtained registration under Section 12AA of the Act and approval under Sec.80G, which was valid till a certain date. The renewal application was rejected based on the absence of registration under the Orphanages and Other Charitable Homes Act, 1960.

The High Court observed that the mere absence of registration under the Act did not automatically imply that the trust was not engaged in charitable activities. The Assessing Officer's objection lacked substantial evidence to prove that the trust was not carrying out charitable activities. The Court concluded that the absence of registration under the specific Act did not negate the charitable nature of the trust's activities. Consequently, the Court upheld the Tribunal's decision and dismissed the appeal filed by the Revenue. The Substantial Question of Law was answered against the Revenue, and the appeal was dismissed with no costs incurred.