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TMI Blog2020 (6) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... he affiliation bodies and boards. CIT (E) has misdirected himself by requiring the assessee society to submit a list of proposed donors and a plan for raising donations. In our considered opinion this is entirely irrelevant at the time of considering the assesee s application for approval u/s 80G. That the assessee had no history of receiving donations in the past also cannot be a ground for rejecting assessee s application u/s 80G. In another case of CIT vs. Rajmala Educational Society [2011 (10) TMI 459 - PUNJAB AND HARYANA HIGH COURT ] held that merely because there was some surplus with the assessee trust, the same could not be the ground to deny registration u/s 80G (5) of the Act. CIT (E) was not justified in rejecting the assessee s application for grant of approval u/s 80G (5) of the Act on frivolous grounds. We direct the Ld. CIT (E) to grant the approval u/s 80G (5) - Decided in favour of assessee. - ITA No. 2334/Del/2017 - - - Dated:- 9-6-2020 - Shri G.S. Pannu, Hon ble Vice President And Shri Sudhanshu Srivastava, Judicial Member For the Assessee : Shri R.P. Basra, CA For the Department : Smt. Sushma Singh, CIT(DR) ORDER PER SUDHANSH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds to various concerns on a regular basis. The Ld, CIT (E) further observed that the assessee society has sufficient funds which were required for the propagation of its objects and also for financing future expansion. It was also stated by the Ld, CIT (E) that the assessee society has failed to elaborate on the target group of persons from whom the donation was to be sought and that there was no list of people who have shown the inclination to donate to the society. The Ld. CIT (E) also observed that since there were investible surpluses available with the assessee society, there was no rationale for seeking donations, With these observations, the Ld. CIT (E) rejected the assessee s application for approval u/s 80G of the Act, 2.1 Aggrieved with this order, the assessee is now before the ITAT and has challenged the rejection of the assessee s application. The following grounds have been raised by the assessee in this regard:- 1. That the Ld. CIT (E) had failed to appreciate that the Appellant Trust had applied for exemption under section 80G of the Income Tax Act, 1961 in the prescribed format, Form 10G, alongwith all the requisite documents, 2. That the CIT (E) has wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was to be diverted for the personal benefit of any member of the society. It was also submitted that the assessee society was catering to the population in the rural area where there were no regular banking services and, therefore, the cash collected against fees etc was kept in the premises only and was deposited only after a suitable security escort was arranged for taking the cash for deposit in the bank and, therefore, keeping huge cash balance was due to a genuine difficulty and the same cannot be the ground for rejection of assessee s application. It was also submitted that the genuineness of the objects of the society cannot be doubted as the department had given approval for registration u/s 12AA of the Act. The Ld. AR also placed reliance on a number of judicial precedents of the Jurisdictional High Court of Punjab Haryana High support of the contention that the assessee s application had been wrongly rejected, 4.0 In response, the Ld. CIT (DR) vehemently supported the order of the Ld. CIT (E) and submitted that out of the 33 objects mentioned in the objects clause, only 13 objects related to furtherance of education and that the rest of the objects were of general pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference from the fact of the assesee earning interest from FDRs and from the fact of maintaining FDRs. It is an accepted practice and a well known fact that educational institutions are directed to maintain some sort of reserve funds in the form of FDRs by the bodies granting affiliation and, therefore, the assessee cannot be put to a disadvantage for following the mandatory requirement by the affiliation bodies and boards. We also note that the Ld. CIT (E) has misdirected himself by requiring the assessee society to submit a list of proposed donors and a plan for raising donations. In our considered opinion this is entirely irrelevant at the time of considering the assesee s application for approval u/s 80G. That the assessee had no history of receiving donations in the past also cannot be a ground for rejecting assessee s application u/s 80G, 6.1 The Hon ble High Court of Punjab Haryana, which is the Jurisdictional High Court for the assessee society, in the case of Sonipat Hindu Educational Charitable Society vs. CIT Anr, reported in (2005) 278 ITR 262, while deciding assessee s appeal against rejection of assessee s application for recognition u/s 80G (5) of the Act, h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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