2022 (4) TMI 688 - HC - Income Tax

Renewal u/s 80G(5)(vi) - Whether the Tribunal was justified in directing the Commissioner of Income Tax to grant renewal without any material to show that the activities of the respondent/Trust are charitable in nature? - HELD THAT - This court is of the opinion that after considering the submissions made by the parties and analysing the entire materials placed before it, the Tribunal being the fact finding body, allowed the assessee's appeal. Moreover, the issue involved herein is question of fact and the same does not involve any principle of law, warranting interference - See METROARK LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CALCUTTA 2004 (1) TMI 397 - SUPREME COURT as held the law on the subject is clear. The Tribunal is the final fact-finding authority. Unless it is shown that there is something perverse in its finding, this Court would not interfere. No authority is required for this purpose. That apart, it is settled law that a court of appeal interferes not when the judgment under attack is not right, but only when it is shown to be wrong Refer Dollar Co. v. Collector of Madras 1975 (5) TMI 87 - SUPREME COURT - Tax case Appeal filed by the Revenue stands dismissed.

Summary

Issues:
Renewal of exemption under Section 80G(5)(vi) of the Income Tax Act without proof of charitable activities.

Analysis:
The appeal was filed by the Revenue against the order of the Income Tax Appellate Tribunal directing the renewal of exemption under Section 80G(5)(vi) of the Income Tax Act. The substantial question of law admitted for consideration was whether the Tribunal was justified in granting renewal without evidence of charitable activities by the respondent Trust. The respondent, a trust running a Tamil High School, had its exemption renewal rejected by the Commissioner of Income Tax-II, which was later overturned by the ITAT. The Tribunal found that the trust was engaged in charitable activities by running the school for the benefit of the local population without any diversion of income for non-charitable purposes.

The High Court examined the Tribunal's findings, which acknowledged the charitable nature of the trust's activities based on its registration under Section 12AA. The Court noted that there was no evidence of misuse of assets or income for private purposes, affirming the trust's charitable endeavors. Referring to the decision in Metroark Ltd. v. CCE, the Court emphasized the Tribunal's role as the final fact-finding authority, with interference warranted only in cases of perversity in findings. Citing Dollar Co. v. Collector of Madras, the Court reiterated that appellate intervention is justified only when a judgment is proven wrong, not merely when it is deemed incorrect.

In conclusion, the High Court dismissed the Revenue's appeal, emphasizing that the Tribunal's decision was based on factual considerations and did not raise any legal principles necessitating intervention. The Court upheld the Tribunal's order directing the renewal of the exemption under Section 80G(5)(vi) for the trust, highlighting the trust's charitable activities as the basis for the decision.