9911796707
TMI Blog2014 (2) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled for approval under the provisions – Decided against Assessee. - ITA No. 370/Agra/2013, ITA No. 380/Agra/2013 - - - Dated:- 14-2-2014 - Shri Bhavnesh Saini And Shri Pramod Kumar,JJ. For the Appellants : Shri M. M. Agarwal, C.A. For the Respondent : Shri Anirudh Kumar, CIT/DR ORDER Per Bhavnesh Saini, J.M. This order shall dispose of both the above appeals filed by different assessees challenging the order u/s. 80G(5) of the IT Act. 2. The ld. counsel for the assessee submitted that the issue is same in both the appeals and mainly argued in ITA No. 370/Agra/2013 and stated that the finding in that case may be followed in ITA No. 380/Agra/2013. Both the appeals are, therefore, disposed of through this common consolidated order. 3. We have heard the ld. representatives of both the parties and perused the material on record. ITA No. 370/Agra/2013 ( Yug Chetna Parmarth Trust): 4. This appeal by the assessee is directed against the order of ld. CIT-I, Agra dated 21.11.2013, challenging the order u/s. 80G(5) of the IT Act rejecting the application of the assessee of approval under the above provisions. 5. Briefly, the facts of the case are that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligious activities." 7. On the other hand, the ld. DR relied upon the order of the ld. CIT and submitted that the provisions of section 80G(5) apply to charitable trusts only and since the assessee is admittedly having dominant objects which are religious in nature and for the benefit of Hindu community, therefore, the assessee would not be entitled for any relief. 8. We have considered the rival submissions and the material available on record. The relevant provisions for disposal of appeal are reproduced as under : 8.1 Section 80G(5)(i), (ii) (iii) provides as under :- (5) This section applies to donations to any institution or fund referred to in sub- clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :-- (i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and12 or clause (23AA)] or clause (23C) of section 10 : Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunity. The ld. counsel for the assessee did not challenge these findings of fact recorded by the ld. CIT in the impugned order. The ld. counsel for the assessee also did not argue or refer to any evidence or material to show that the assessee trust is established for charitable purpose only. What he has pleaded was that since the expenditure incurred by the assessee trust on religious activities was less than 5% of the total income, therefore, the assessee should be given benefit of section 80G(5B) of the IT Act. It is, thus, clear that the assessee did not dispute that the assessee trust exists and was established having dominant objects, which are religious in nature and for the benefit of Hindu community. Thus, the assessee did not exist for the charitable purpose only. The conditions of section 80G(5) are, therefore, not satisfied in the present case. The ld. CIT was, therefore, justified in relying upon the decision of Hon'ble Supreme Court in the case of Upper Gangage Sugar Mills Ltd. and others (supra), in which it was held - "Section 80G of the Income-tax Act, 1961, sets out the deductions to be made, in accordance with and subject to its provisions, in computing the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in contravention of provisions of section 80G(5) of the IT Act because it clarifies the position that the assessee trust when incurred expenditure on religious activities, which is less than 5% of the total income would be deemed to be Institution or fund, to which the provisions of this section apply. The small percentage of amount not exceeding 5% provided in this section clearly prove that the assessee shall have to establish on record that it existed and established for charitable purpose only and while incurring the expenditure during any previous year, which is of a religious nature for an amount not exceeding to 5% of its total income for that previous year, shall be deemed to be an Institution or fund to which the provisions of section shall apply. The benefit of section 80G(5B) is thus provided to limited extent to the Institution or trust or fund, established for charitable purpose only when it incurs expenditure on religious activities not exceeding 5% of its total income in that previous year. This provision did not say that the assessee trust or fund should not exist or establish for charitable purpose. The assessee shall have to prove remaining expenses are incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dominant objects of the assessee trust specifically held that same are religious in nature and for the benefit of Hindu Community. Therefore, the provisions of section 80G(5)(iii) is clearly attracted in the case of assessee for denial of approval under the above provisions and as such sub-section (5B) to section 80G would also not support the arguments of the ld. counsel for the assessee. The ld. counsel for the assessee mainly relied upon the decision of Karnataka High Court in the case of DIT(exemption) vs. International Society for Krishna Consciousness (supra), in which the assessee society was registered under the Societies Registration Act for religious and charitable purpose. It was registered u/s. 12AA of the IT Act as a charitable trust, the renewal was sought and it was found that the total expenditure towards religious expenses were incurred which were less than 5% of the total income. Therefore, the departmental appeal was dismissed. In the case of assessee, the ld. CIT has given specific finding that dominant objects of the assessee trust are religious in nature and for the benefit of Hindu community. Therefore, the assessee did not exist and established for charita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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