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TMI Blog2020 (9) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... ly as well, then the CIT exemption, shall assess the impact of carrying out of these activities and also contributing substantially to other trust for carrying out of the charitable activities in accordance with law. CIT exemption shall also examine in other attending Circumstances Like the major activities of the charitable work carried out by the other charitable institute and only part of it were carried out by the assessee by doing three activities namely i) Warne Baby Fold ii) Salaam Balaak Trust iii) Jeevan Dhara Trust. - 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 ..... Exemption) in para 4 is contrary to record as the documents and evidences were available with the CIT(E) which shows doing all the charitable activities. 4. The ld. AR for the assessee has submitted a written submissions (containing pages 1 to 7) for buttressing his case, which reads as under: Broad Propositions 1 That an application was filed by the Appellant before the Commissioner of Income Tax (Exemptions), Lucknow ['CIT(E)'] for grant of approval under section 80G(5) of the Act. 2. Vide order dated 30.8.2019. (copy placed at pg1-2/PB.) the said approval was denied by CIT(E) inter alia holding that: 4. From a perusal of the notes on activities submitted by the assessee trust it is noticed that the trust is getting CSR fund from Varuna Integrated logistics Pvt. Ltd. The applicant is, in the name of charity, donating its receipts to other trusts. The applicant has made donations to other trusts/societies like Warne Baby Fold, Salaam Balaak Trust and Jeevan Dhara Trust etc., to do charity work on it behalf. From a perusal of material available on record the assessee itself was not involved in any of the charitable activities. 5. Thus there is no material availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (please refer pg.44- 52/PB.) 5. That the three institutions in question which were granted aid by the Appellant are involved in following activities; Warne Baby Fold is a registered orphanage in Bareilly which is involved in education of poor and orphaned children. Salaam Baalak Trust, is an A/GO which provides sensitive and caring environment to street and working childr^. and other children on the margins of society. It puts in efforts to take care of the medical and psychological needs of the street children who are exposed to innumerable infections and diseases. . It provides full time and short stay facility to the children in need of care and protection. It also encourages the use of creative and performing arts to exhibit talents of children such as photography, theatre, dance and puppetry. Further it strengthens the independence will of children and prepare them for a life of their own forms Jeevan Dhaara Trust runs a charitable hospital in Bareilly. It is also worth noting that all the aforesaid institutions are themselves registered u/s 12AA of the Act. 6. The Appellant pleads that once the registration u/s 12AA of the Act was in existence, the approval under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax was satisfied with the genuineness of the objects of the trust for the subsequent assessment year, the refusal of the registration for the previous assessment year 2011-12 was not justified. The question of exemption of the application of income received by way of donation, is a separate issue and which may be required to be considered, when the return is filed by the Trust and is examined by the Income Tax Officer. The question as to whether the donations by the societies was the expenditure of the Trust for charitable and religious purposes will be examined at the time of examining the return. In the result the income tax appeal is allowed. All the three substantial questions of law formulated as above are decided in favour of the assessee, and against the revenue with a clarification that the registration under Section 12AA and approval under Section 80G would not by itself entitle the Trust for exemption of the income of its donors or of the Trust for the assessment year 2011-12, For claiming such exemption the returns of the donor and the Trust will be examined, for orders to be made in accordance with law." 8. The Appellant places reliance on the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kul Mahavidyalaya' nothing substantial or concrete had been done by assesseo in field of charity - Commissioner (Exemptions), therefore, found application of assessee to be premature and same was accordingly rejected - It was noted that Commissioner (Exemptions) had not disputed that assessee satisfied conditions of section 80G(5) - Moreover, assessee had carried out some of charitable activities in furtherance to its objects - Whether in aforesaid circumstances, there was no bvsis for Commissioner (Exemptions) to reject application under section 80G(5) - Held, yes - Whether, therefore, impugned order was to be set aside and Commissioner (Exemptions) was to be directed to grant approval to assessee-trust under section 80G(5) - Held, yes [Paras 5 and 5.1] [In favour of assessee]" 10. Reliance is also placed on the Hon'ble Punjab and Haryana High Court's judgement in CIT(E) Vs. M/S Sant Girdhar Anand Parmhans Sant Ashram 1TA no. 50 of 2018, wherein the court observed that; "Accordingly, it was recorded by the Tribunal that since assesses had been granted exemption under Section 12AA of the Act which was in existence and in case of any violation, the same ! . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng such approval. This is clearly laid down under Clause 3 of Rule 11AA "The Commissioner may call for such further documents or information from the institution or fund or cause such inquiries to be made as he may deem necessary in order to satisfy himself about the genuineness of the activities of such institution or fund." In view of the above, it is clear that despite the registration u/s 12AA, the assessee would not be entitled to an approval u/s 80G without establishing genuineness of its activities. Facts of the Case: On perusal of the documents filed in the paper-book it is apparent that the assessee has no material to establish genuineness of its activities. The assessee trust has received donations from the sole donor M/s Varuna Integrated Logistics Private Limited which apparently is a company related to the trustees. It may be observed that M/s Varuna Integrated Logistics Private Limited did not make any "Voluntary" contributions and instead it has given only the CSR funds which are mandatory under the Company Law. The assessee instead of performing charitable activities with these funds, chose to be just a pass-through entity and diverted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voucher made on the stationery of M/s Varuna Integrated Logistics Private Limited showing payment of coaching fees for the three children of Mr. Mahendra Saxena. Again it is not clear why all the children of Mr. Mahendra Saxena deserve this kind of support and how Mr. Mahendra Saxena is connected with M/s Varuna Integrated Logistics Private Limited. The same observations can be made with regard to the payment voucher at paper-book 78(B). The documents at page 79(B), 80, 81, 82, 83, 84, 85, 86 are relating to payment of school fees and coaching fees of Ms. Bharti Sharma. It is not clear on what basis this girl was chosen to be a beneficiary and whether she has some connection with the trustees/M/s Varuna Integrated Logistics Private Limited. Similarly other vouchers also show that the payments have been made for specific beneficiaries and not for the benefit of the public at large. The method of selection of such beneficiaries is not transparent and hence genuineness and purpose of expenses becomes suspect. It is observed that not only the school fees, even the coaching fees have been paid for the chosen few. The assessee has nothing to demonstrate that it has performed any a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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