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TMI Blog2018 (5) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... as university/institution established wholly for the purpose of imparting education and not for the purpose of generating profits. CIT(E) has not given any cognizance to the above facts and has in fact not examined the eligibility of the assessee to grant of approval vis a vis the conditions set out in section 80G(5) - Restore the issue back to the Ld.CIT(E) to reconsider the application for grant of approval strictly in the light of the conditions set out in section 80G(5) - Decided in favour of assessee for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... the table and the reply of the applicant are a clear indicator that the applicant society's main focus is on acquiring assets and not the propagation of education as claimed. It has accumulated huge assets in the form of fixed assets and FDRs. On the basis of copy of financial statements the following figures correctly reflect the exact financial position of the applicant society: F.Y. Fixed Asset (Gross Block) Net Current asset 2012-13 ₹ 1,10,40,06,902/- ₹ 2,91,41,935/- 2013-14 ₹ 1,30,83,12,390/- ₹ 4,82,40,914/- 2014-15 ₹ 1,51,29,86,569/- ₹ 6,93,09,522/- 2015-16 ₹ 1,67,35,78,224/- ₹ 8,84,90,760/- The above clearly shows that the society has had, in the past, large investible surpluses that have primarily been invested to acquire fixed assets. The society is having huge cash balances which could otherwise be utilized for so claimed expansion of education. There is no rationale for seeking donations using them to acquire assets when the society has been receiving a huge sum in the form of various types of fees. 5. The analysis of both the objects & activities of the applicant exemplify that the applicant is runn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n projected for donations although there is no history of any receipt of donations either. The activities and claim of the applicant society is not corroborated by its emphasis on assets creation and other investments till now. The application for approval u/s 80G is accordingly rejected." 4. Aggrieved by the same, the assessee society has come up in appeal by raising following grounds: "1. That the learned CIT (Exemption) Chandigarh has not denied the compliance of any of the five basic condition stated in sub section (i) to (v) of Section 80G(5) of the Income Tax Act, 1961 read with Rule 11AA of the Income Tax Rules, 1962 for grant of registration u/s 80G of the Act. 2. That the learned CIT (Exemption) Chandigarh has wrongly denied the exemption on the basis that the appellant has not received any donation in the past which is not a condition for grant of registration u/s 80G of the Act. 3. That the learned CIT (Exemption) Chandigarh has wrongly denied the registration u/s 80G of the Act as the appellant has failed to elaborate on target group, exact contours of expansion in education, how expansion would prove beneficiaJ to general public at large and list of people who have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hellip;……………… ……………………. (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. (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 and 12 or clause (23)] 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 to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if,- (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that all the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are fulfilled by the institution or fund, he shall record such satisfaction in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid (5) Where the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing : Provided that no order of rejection of an application shall be passed without giving the institution or fund an opportunity of being heard (6) The time limit within which the Commissioner shall pass an order either granting the approval or rejecting the application shall not exceed six months from the [end of the month in] which such application was made : Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub-rule (3) shall be excluded.]" 6. The Ld. counsel for assessee pointed out that the Ld.CIT(E) had denied the approval sol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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