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2021 (7) TMI 627 - AT - Income TaxApproval to the appellant u/s 80G - non-production of original bills and vouchers for verification of the activities and for verification of expenses having being incurred for objective of the assessee society, non-production of details of donation as well confirmation in the cases where cash donations exceeded ₹ 2000/- as well non-production of details of charitable activities carried on by the assessee - Whether the activities of the appellant trust were not charitable in nature? - whether appellant was not sufficient to prove genuineness of activities and its objects ? - HELD THAT - In the instant case before us, the assessee s registration certificate had already expired on 23.04.2020 which could not be renewed by assessee in time ostensibly owing to spread of pandemic Covid 19 disease and the same was later renewed on 11.06.2021 with retrospective effect from 24.04.2020, which was after the ld. CIT(E) rejected the application for grant of approval u/s 80G the assessee has also not furnished details as were asked by CIT(E) in exercise of its powers u/s 80G(5) read with proviso of the 1961 Act and Rule 11AA of the 1962 Rules as the assessee did not co-operated with the Revenue and did not furnished original bills and vouchers to enable verification as to activities and also to verify whether the expenses were incurred for attainment of charitable objects of society , details of donations received and confirmation of cash donations exceeding ₹ 2000 received during last three year were also not furnished by assessee before ld. CIT(E) and also the assessee did not furnish evidence to enable ld. CIT(E) in support that activities carried out by assessee are charitable in nature. The aforesaid documents/evidences are also not furnished before us by the assessee , except that renewal of registration dated 11.06.2021 with retrospective effect from 23.04.2020 under Societies Registration Act, 1860 is filed for the first time before tribunal which is a fresh evidence filed for the first time before tribunal which as per ld. CIT-DR requires verification by department. We have already held that inquiry as contemplated u/s 80G(5) of the 1961 Act read with Rule 11AA of the 1962 Rules as to genuineness of the activities of the taxpayer institution is not an empty formality , more-so there is a time gap between grant of registration u/s 12AA in May 2019 and an application filed by assessee on 10.03.2020 with CIT(E) for grant of approval u/s 80G. In the fairness to both the parties and based on facts and circumstances of the case, we are inclined to set aside and restore application filed by assessee for grant of approval u/s 80G back to the file of ld. CIT(E) for consideration afresh of aforesaid assessee s application on merits in accordance with law, as in our considered view it is a fit case of remand back to the file of ld. CIT(E) for fresh consideration of assessee s application and our view is supported by Larger Bench judgment in the case of Commissioner of income tax (Exemption) Lucknow U.P v. Reham Foundation 2019 (1) TMI 1634 - ALLAHABAD HIGH COURT The assessee is directed to appear before ld. CIT(E) and furnish all the relevant details/evidences in support of its application for approval u/s 80G of the 1961 Act, which will be decided by ld. CIT(E) on merits in accordance with law. Appeal of the assessee is allowed for statistical purposes.
Issues Involved:
1. Rejection of application under Section 80G by the Commissioner of Income Tax (Exemptions) (CIT(E)). 2. Determination of the charitable nature of the appellant trust's activities. 3. Compliance with conditions laid down under Section 80G(5) of the Income-tax Act. 4. Impact of non-renewal of registration under the Societies Registration Act on the application under Section 80G. 5. Adequacy of the material submitted to prove the genuineness of the trust's activities. 6. Consideration of the trust's registration under Section 12AA. 7. Submission of documentary proof of activities and donations. 8. Genuineness of the activities of the trust. Detailed Analysis: 1. Rejection of Application under Section 80G: The CIT(E) rejected the appellant trust's application for approval under Section 80G of the Income-tax Act, 1961, citing several deficiencies. The primary reasons included the expiration of the trust's registration under the Societies Registration Act, non-submission of original bills and vouchers, and lack of confirmation of donations exceeding ?2,000. 2. Determination of Charitable Nature: The CIT(E) concluded that the activities of the appellant trust were not charitable in nature. This conclusion was based on the trust's failure to provide sufficient documentary evidence to support its claim of engaging in charitable activities. The tribunal noted that the CIT(E) is required to verify the charitable nature of the trust's activities before granting approval under Section 80G. 3. Compliance with Section 80G(5) Conditions: The CIT(E) found that the appellant trust did not fulfill all the conditions laid down under Section 80G(5) of the Income-tax Act. Specifically, the trust failed to produce original bills and vouchers for verification, did not submit details of donations received, and did not provide confirmation for cash donations exceeding ?2,000. 4. Impact of Non-Renewal of Registration: The trust's registration under the Societies Registration Act expired on April 23, 2020, and was not renewed in time due to the COVID-19 pandemic. The CIT(E) rejected the application under Section 80G partly because the trust's registration had expired. The tribunal noted that the registration was later renewed retrospectively from April 24, 2020, but this renewal occurred after the CIT(E) had already passed the order rejecting the application. 5. Adequacy of Material Submitted: The CIT(E) contended that the material filed by the appellant trust was insufficient to prove the genuineness of its activities and objects. The trust did not submit adequate documentary evidence to support its claims of engaging in charitable activities, leading to the rejection of the application. 6. Consideration of Section 12AA Registration: The appellant trust argued that once it was granted registration under Section 12AA, the approval under Section 80G should be automatic. However, the tribunal noted that the CIT(E) still has the authority to verify the genuineness of the trust's activities and the fulfillment of conditions under Section 80G(5), even if the trust is registered under Section 12AA. 7. Submission of Documentary Proof: The CIT(E) rejected the application under Section 80G on the basis that the trust did not submit documentary proof of its activities. The tribunal emphasized the importance of providing original bills, vouchers, and confirmation of donations to verify the trust's activities and expenses. 8. Genuineness of Activities: The CIT(E) held that the activities of the trust were not genuine, warranting the rejection of the application under Section 80G. The tribunal underscored the necessity for the CIT(E) to satisfy himself about the genuineness of the trust's activities before granting approval. Tribunal's Decision: The tribunal remanded the matter back to the CIT(E) for fresh consideration of the appellant trust's application for approval under Section 80G. The tribunal directed the CIT(E) to provide proper and adequate opportunity to the trust to furnish all relevant details and evidence in support of its application. The CIT(E) was instructed to decide the matter on merits in accordance with the law, ensuring compliance with principles of natural justice. The tribunal emphasized that the inquiry into the genuineness of the trust's activities is not an empty formality and must be conducted thoroughly.
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