2021 (2) TMI 795 - AT - Income Tax

Approval u/s 10(23C)(v) - No approval of Prescribed Authority under section 10(23C)(v) - Assessee contended before the Ld. CIT(A) that the requirement of approval under section 10(23C)(v) of the I.T. Act was provided by Rule 2C of I.T. Rules, 1962, w.e.f. 15.11.2014 and hence, there were no requirement for approval by the Prescribed Authority - HELD THAT - We do not subscribe to such a view because even Section 10(23C)(v) was applicable for the assessment year under appeal and it was necessary to get approval of the Prescribed Authority before claiming exemption under such provision. It is only on 15.11.2014 the Prescribed Authority was designated to be the Commissioner of Income Tax (Exemptions) as per Board s Notification Dated 05.03.2015. Therefore, contention of Learned Counsel for the Assessee has no merit and is accordingly rejected. Assessee also contended that as per Section 115BBC(2) the assessee need not to get approval under section 10(23C)(v) of the I.T. Act because in case anonymous donations is received by the Trust/Institution created or established wholly for religious purposes. However, it is not a case of the Revenue that assessee received any anonymous donations or if any addition have been made on that account under section 115BBC of the I.T. Act, 1961. Therefore, this contention of the Learned Counsel for the Assessee is also rejected. Assessee does not have any approval under section 10(23C)(v) of the I.T. Act for the assessment year under appeal, therefore, there is no question of assessee getting any exemption under the same provision. The burden upon assessee to claim exemption under such provision have not been discharged by assessee by producing any adequate evidence on record. The authorities below were, therefore, justified in rejecting the claim of assessee for denial of exemption under section 10(23C)(v) - Appeal of the Assessee dismissed.

Summary

Issues:
Interpretation of provisions of Section 10(23C)(v) of the I.T. Act, 1961 for A.Y. 2011-2012.

Analysis:
The appeal by the Assessee was directed against the Order of the Ld. CIT(A)-40, Delhi, challenging the interpretation of Section 10(23C)(v) of the I.T. Act, 1961. The Assessee, a Gurudwara not registered under sections 11 and 12 of the I.T. Act, was treated as a normal AOP by the A.O. The A.O. initiated re-assessment proceedings under section 147 due to non-filing of income tax return and observed discrepancies in interest and rent received. The Assessee claimed exemption under section 10(23C)(v) as a religious organization but failed to provide evidence of registration or approval from the Prescribed Authority, leading to rejection of the claim.

The A.O. disallowed certain expenses under section 69C and made additions, which were later deleted by the Ld. CIT(A). The Assessee challenged the denial of exemption under section 10(23C)(v) before the Ld. CIT(A), arguing that approval was not required as per Rule 2C of I.T. Rules. However, the Ld. CIT(A) dismissed this ground, emphasizing the necessity of approval under the amended provision.

During the hearing, the Learned Counsel for the Assessee reiterated that approval by the Prescribed Authority was not required for the assessment year under appeal. The contention was based on Section 115BBC(2) regarding anonymous donations. The Ld. D.R. argued that the burden was on the Assessee to prove approval for claiming exemption under section 10(23C)(v).

The Tribunal analyzed the provisions of Section 10(23C)(v) and Rule 2C of I.T. Rules, emphasizing the requirement of approval by the Prescribed Authority for claiming exemption. The Tribunal rejected the Assessee's argument that approval was not needed before 15.11.2014, as the provision was applicable for the assessment year under appeal. The Tribunal also dismissed the Assessee's reliance on Section 115BBC(2) as no anonymous donations were in question. As the Assessee failed to provide evidence of approval, the denial of exemption under section 10(23C)(v) was upheld.

In conclusion, the Tribunal dismissed the Assessee's appeal, noting that without approval under section 10(23C)(v), the Assessee could not claim exemption. The discussion on the addition made by the A.O. was deemed academic as those additions were deleted by the Ld. CIT(A). Thus, the denial of exemption was justified, and the appeal was dismissed.