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TMI Blog2016 (5) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee trust has incurred expenditure on its objects which is less than 85% of the total gross receipts. We find the in the case of N.N. Desai Charitable Trust Vs. CIT [1999 (5) TMI 11 - GUJARAT HIGH COURT] has held that while granting exemption u/s.80G the authority granting approval cannot act as assessing authority. The enquiry should be confined to finding out if institution satisfies prescribed conditions or not. Actual assessment of institution would not affect claim for special deduction u/s.80G. CIT in our opinion is not justified in denying exemption u/s.80G on the ground that the assessee trust has incurred expenditure on its objects which is less than 85% of the total gross receipts and that the assessee Trust is charging fees for workshop and laboratory activities. We hold that the CIT is not justified in denying exemption u/s.80G. We accordingly set aside his order and direct him to grant exemption u/s.80G to the assessee Trust. - Decided in favour of assessee. - ITA No.1465/PN/2014 - - - Dated:- 20-5-2016 - MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM For the Appellant : Shri C.D. Upasani Shri Sahil Garud For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratory activities. In view of the above, he rejected the request for exemption u/s.80G holding that the trust does not fulfil the conditions laid down in section 80G(5) of the I.T. Act. 4. Aggrieved with such order of the CIT, the assessee is in appeal before us with the following grounds : 1. The Hon'ble Commissioner of Income Tax-I, Nashik also failed to appreciate the fact that by virtue of granting registration u/s.12A of the Income Tax Act, 1961 the Department has accepted the fact that the Trust is a charitable organisation and that for grant of exemption u/s. 80G of the Income Tax Act, 1961 there is no stipulation as to the amount to be spent by the Trust for being eligible for exemption. 2. The Hon'ble Commissioner of Income Tax-I, Nashik failed to appreciate the fact that the Trust is a newly formed charitable organisation and that the gross receipts of trust are well below the basic exemption limit of taxable income as applicable to the Trusts/AOP. As such anyway there is no liability towards Income Tax on the Income of the trust. 3. The Hon'ble Commissioner of Income Tax-I, Nashik erred on facts while c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. The actual assessment of the assessee and its actual liability to tax are matters to be decided only in the assessment proceedings. Similar view has been taken by the Pune Bench of the Tribunal in the case of Shikshan Prasarak Mandali Vs. CIT reported in 117 TTJ 337 and in the case of Shri Krishna Kirpa Gaushala Samiti Vs. CIT (Exemption) vide ITA No.103/Chd./2015 order dated 21-09-2015. 6. Without prejudice to the above, he further submitted that the amount of expenditure incurred on objects as recorded by the CIT in his order defers from actual amount incurred as per the audited statement since the CIT has not considered the depreciation as per the audited profit and loss account. So far as the objection of the CIT that the trust is charging fees for workshops and for laboratory activities he submitted that the same is collected to meet the expenditure for the workshop and laboratory activities. He accordingly submitted that the assessee should be granted exemption u/s.80G. 7. The Ld. CIT Departmental Representative on the other hand strongly relied on the order of the CIT. He submitted that the CIT has given justifiable reasons for denying exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the judgments referred to by the learned counsel for the appellant are not applicable to the facts of the present case arising out of the question of registration of the Trust and not of assessment. 14. The issue has been examined that at the stage of registration and for exemption under Section 80G of the Act, the stated object of the trust is required to be examined. Whether the funds are properly applied or not, can be examined by the Assessing Officer at the time of framing the assessment. In the case on hand, the only reason given by the ld. Commissioner of Income-tax, Rajkot-III, Rajkot in the impugned order for rejecting the application of the assessee-trust for recognition u/s 80G(5) is that the assessee-trust has failed in making expenditure to the extent of 85% of its income. Therefore, keeping in view the ratio of judgment of Hon ble Punjab Haryana High Court in the case of CIT v. O.P.Jindal Global University (supra), the recognition u/s 80G(5) cannot be refused on this ground. I, therefore, set aside the impugned order of ld Commissioner of Income-tax, Rajkot-III, Rajkot and direct him to grant the recognition u/s 80G(5) of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be decided only in the assessment proceedings. 9. To the similar effect is also the decision of our co-ordinate bench in the case of Shikashan Prasarak Mandali (supra). In this case also, the Commissioner of Income-tax denied recognition under section 80G for the reason that the exemption under sections 11 12 had been denied to the assessee in the assessment proceedings. As per the Bench, such objection would not ipso facto militate against denial of recognition under section 80G as long as in principle and on a prima facie basis assessee complied with the conditions set out in section 80G(5)(i) to (v) of the Act. 10. Having regard to the aforesaid observations of the Hon'ble Gujarat High Court, in our view, in the present case the objection raised by the Commissioner of Income-tax to deny the recognition under section 80G is founded on irrelevant considerations by embarking upon an exercise which is only in the realm of assessment proceedings. In the present case, undeniably the assessee is registered under section 12A of the Act and such registration continues. In this view of the matter, in our view, the assessee fulfils the condition presc ..... 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