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TMI Blog2014 (2) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... himself within the limitation of statutory mandate and cannot travel beyond it – here, nothing has been brought on record to show that the assessee has not fulfilled the conditions enumerated in clause (i) to (v) of section 80G(5). The material on record clearly proves that the alleged donation had been reflected in the accounts of the assessee – thus, the conclusion reached by the DIT (E) that the assessee trust cannot be held to be a fully charitable organisation is totally unsubstantiated and based on mere imagination than facts – thus, the DIT (E) was not correct in rejecting the assessee's application for renewal of approval u/s 80G(5) – the DIT (E) is directed to renew the approval granted earlier u/s 80G (5) of the Act to the assessee – Decided in favour of Assessee. Deletion made u/s 68 of the Act – Unexplained cash credit – Held that:- The CIT (A) held that when there are both cash credits and repayments, the Assessing Officer cannot consider the cash credits alone ignoring the repayments - when there are both receipts and payments only receipts cannot be considered totally ignoring the repayments -In such situation only the peak amount is to be considered – thus, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted a note on the activities carried out by the trust during different financial years as well as the details of beneficiaries. The assessee also produced the books of accounts and an amended trust deed. It was contended by the assessee that the trust deed was amended by bringing specific provisions to remove ambiguities if any, which were pointed by the DIT (E) earlier keeping its basic fabric of charitable object intact. It was also submitted that the trust deed amendment was registered with Sub-Registrar Office, Vallabh Nagar, Hyderabad. 3. It was submitted by the assessee that the deficiency/defects pointed out by the DIT (E) with regard to earlier clause-7 and sub- clauses (a) (b) and (c) of clause 6, it was submitted that this clause as forming part of the trust deed cannot be construed to mean that it gives unbridled power to trustees to appropriate their funds as they think fit. So far as the allegation of the DIT (E) in his earlier order that some other clauses as appearing in the object clause-2 being of non charitable nature it was submitted that all such sub- clauses identify the activities which lead to the achievement of the objects of the trust. The DIT (E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded that the assessee has not truthfully recorded all its receipts and expenditure during different accounting year. He was therefore of the view that as assessee has not satisfied the condition stipulated in clause (iv) of section 80G(5), it cannot be granted approval. The DIT (E) further noted that in the subsequent financial year 2010-11 also the assessee was found to have paid donation to Akshara Foundation on two instances i.e., 3-11-2010 - Rs.25,000/- and on 8-11-2010 Rs.20,000/-. However, the bank account statement of the assessee in Axis Bank indicate that in addition to the aforesaid two amounts, the assessee has paid a major amount of Rs.5 lakhs to Akshara Foundation on 28-3-2011. He further observed that the said amount has been paid after credit of a sum of Rs.10 lakhs from Prajna Technologies Services Pvt. Limited in that account. He observed that when the assessee has shown payment of two donations to Akshara Foundation claiming to be charitable organisation, it is not known as to how and under what circumstances such major amount of Rs.5 lakhs was paid to that Institution which is not shown in the statement filed during the proceedings. He further noted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to Akshara Foundation has not been shown in the statement of donations furnished by the assessee for the year 2009-10 and not reflected in the balance-sheet as on 31-3-2010, it was submitted by the learned AR that such allegation is totally unfounded as the total donation/charity amounting to Rs.3,20,160 is included in the income and expenditure account which is a part of the audited balance sheet. It was submitted that the donations made by the assessee to Akshara Foundation are part of total donations of Rs.1,71,900/- made during the financial year 2010-11 which is also reflected in the income and expenditure statement and balance-sheet for the year 2010-11. 6. So far as the allegation of DIT (E) that the assessee has advanced loan of Rs.5 lakh to Akshara Foundation is concerned, the learned AR submitted that the amount ofRs.5 lakh was paid as per the request from Akshara Foundation which was sanctioned by the assessee trust with the condition that the same would be utilised only for the purpose it was granted within 90 days of release. A further condition was there to the effect that in the unlikely event of the amount being not utilised, Akshara Foundation should refund t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the objects of the trust. ii) The assessee has not truthfully maintained its receipts and expenditure during different years as the donation made to Akshara Foundation has not been reflected in its accounts which in violation of sub-clause (iv) of section 80G(5). iii) The assessee has advanced a loan of Rs.5 lakh to Akshara Foundation by itself obtaining a loan of Rs.10 lakh from Prajna Technologies Services Pvt. Limited which is not shown in the statement of donations, thereby the assessee cannot be considered as fully charitable organisation having regard to the provisions contained in clause (iv) of section 80G(5) of the Act. 9. So far as the first objection of the DIT (E) is concerned, it is to be noted that he does not dispute the fact that donations were made to Akshara Foundation which is a charitable trust registered u/s 12A of the Act. Therefore, donation given to another charitable trust is an application of income for charitable purposes as held by the co-ordinate Bench in case of YVS Bhanumurthy vs. DIG (supra). Therefore, donation given to another registered charitable trust cannot be a ground for not granting approval u/s 80G (5)(vi) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of granting approval u/s 80G(5)(iv) the authority concerned is only required to examine whether the trust and institution has fulfilled the conditions enumerated under clause (i) to (v) of section 80G(5). Therefore, the DIT (E) has to restrict himself within the limitation of statutory mandate and cannot travel beyond it. In the present case, nothing has been brought on record to show that the assessee has not fulfilled the conditions enumerated in clause (i) to (v) of section 80G(5). 11. So far as the DIT (E)'s allegation that the assessee has violated the clause(iv) of section 80G(5) by not truthfully maintaining the receipts and expenditure, the same is without any basis. The material on record clearly proves that the alleged donation had been reflected in the accounts of the assessee. That apart it is not disputed that the assessee trust continues to be registered u/s 12A of the Act which pre-supposes, its objects are within the meaning of 'charitable purpose' as defined in section 2(15) of the Act. In the aforesaid circumstances, the conclusion reached by the DIT (E) that the assessee trust cannot be held to be a fully charitable organisation is totally unsubstantiated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/11 There is a delay of 61 days in filing the appeal of the assessee. These cross appeals are against the order of the CIT (A) sustaining the addition of Rs.40,95,000/-. While the department has challenged the order of the CIT (A) for not sustaining the entire addition, the assessee is aggrieved by the addition being sustained by CIT (A). x. We have heard the parties. On perusal of the materials on record as well as orders of the Revenue authorities we find that facts involved and issues raised in these two appeals are identical to ITA No.369/Hyd/11 and 837/Hyd/11. In the impugned year also the Assessing Officer has added the entire receipts of Rs.1,08,05,000/- ignoring the repayments of Rs.55,65,000/-. During the appeal proceedings, the CIT (A) noticed that the peak credits for the relevant previous year j was Rs.90,95,000. Considering the fact that peak credits of Rs.50 lakhs was added as income for the asst. Year 2004-05, the CIT (A) directed the Assessing Officer to retain the balance peak credits of Rs.40,95,000/- as income of the year under consideration. In view of our finding in ITA No.369/Hy7d/11 and 837/Hyd/11, we do not find any infirmity in the aforesaid direction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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