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TMI Blog2013 (12) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... is filed against the said order of the Director of Income-tax (Exemptions) at Chennai. 2. The assessee was registered under section 12AA as a charitable trust in 1995. Simultaneously, the assessee was also granted recognition under section 80G for a period from June 2, 1995 to March 31, 1996. Thereafter, recognition under section 80G has been renewed from time to time against the application put in by the assessee. In that way, the assessee had enjoyed the approval under section 80G from April 1, 1996 to March 31, 2007. 3. Thereafter, the assessee filed a renewal application on March 26, 2012, after a gap of about five years. The assessee has also filed the accounts of the earlier three financial years, 2008-09, 2009-10 and 2010-11. As p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer in the remand report, the Director of Income-tax (Exemptions) rejected the renewal application filed by the assessee. 7. We heard Shri D. Rajasekaran, learned counsel appearing for the assessee and Dr. S. Moharana, the learned Commissioner of Income-tax appearing for the Revenue. Strictly speaking, the reasons pointed out by the Director of Income-tax (Exemptions) per se, are not found sufficient to reject the application put in by the assessee. The assessee had not carried out any charitable activity for the years 2009-10, 2010-11 and 2011-12 for the reason that it had no sufficient funds. That is why the assessee had not sought for renewal of approval under section 80G. Now, one of the trustees, Mr. V. V. Venkatasubramanyam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the appeal filed by the assessee and direct the competent authority to grant exemption to the assessee. 9. But, we are unable to do that. The law does not permit to give approval under section 80G to the assessee, even though this aspect was not considered by the Director of Income-tax (Exemptions). But the Income-tax Appellate Tribunal being the final fact finding authority, cannot ignore a legal lacuna that has come up in the way of granting approval to the assessee under section 80G. As the parties before the Tribunal are permitted to raise questions of law for the first time before it, it is open to the Tribunal to consider question of law, suo motu, in a proceeding before it. 10. The assessee-trust is an offshoot of Universal Lodge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn. The mother body in the present case, Club of Masons has constituted the trust for the purpose of carrying on charitable activities. Therefore, it is a de facto extension of the Club of Masons themselves. By constituting such an independent trust, the Club of Masons, has contravened the rules of mutuality and it is likely to be an association of persons. But since the Club of Masons is not before us, in any proceeding, we are not able to pass any order prejudicially against the mother club. 13. Our enquiries are confined to the trust created by the Club of Masons. This trust is an extension of the mutual Club of Masons. The mother body has not sacrificed or surrendered its mutual status. Therefore, that mutual status transgresses to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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