2024 (2) TMI 43 - AT - Income Tax

Approval u/s 80G denied - incurring non-recurring expenses and construction of building - HELD THAT - On careful perusal of the order of the Ld.CIT(E) and the finding that no evidences were furnished by the assessee for incurring non-recurring expenses and construction of building at Bawani Hansi and also since the assessee has not accounted for any expenditure booked in the income and expenditure account. CIT(E) concluded that there is no any cogent rationale behind claims for approval u/s 80G of the Act. The assessee could not rebut any of the finding of the Ld.CIT(E) before us. Therefore, we sustain the order of the Ld.CIT(E) in denying approval u/s 80G of the Act to the assessee trust - Decided against assessee.

Summary

Issues involved: Denial of registration u/s 80G(5)(vi) of the Act by Ld.CIT (Exemption), Chandigarh.

Summary:

Issue 1: Denial of registration u/s 80G(5)(vi) of the Act

The appellant, an Assessee, filed an appeal against the order of the Ld.CIT (Exemption), Chandigarh, denying registration u/s 80G(5)(vi) of the Act. Despite notice, the appellant did not appear, leading to the disposal of the appeal based on the hearing of the Ld. DR. The Ld. CIT(E) denied approval u/s 80G due to the appellant accumulating large surpluses through fees and charges, maintaining significant FDRs and bank balances. The denial was based on the lack of clarity regarding the target group for donations, expansion plans in education, and public benefit. The Ld. CIT(E) highlighted the need for entities to operate on a no-profit-no-loss basis, citing legal precedents. The appellant's claim of requiring donations for non-recurring expenses was deemed unsubstantiated, as no evidence was provided for construction projects or charitable activities. The order to deny approval u/s 80G was upheld by the ITAT Delhi as the appellant failed to refute the findings and lacked a compelling rationale for approval.

Decision:
The ITAT Delhi sustained the Ld.CIT(E)'s order denying approval u/s 80G of the Act to the appellant trust, ultimately dismissing the appeal.

*Order pronounced in the open court on 30/01/2024*