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TMI Blog2024 (8) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... s 80G. Neither in the report submitted by the ACIT, Circle, Panipat, nor in the impugned order, passed by respondent No. 1 CIT, there is a categoric discussion or specific finding that the donations/funds received by the petitioner society have been utilised for any profit, personal gains or any other purposes. In the said report dated 17.03.2006, which has been primarily relied upon by respondent No. 1 CIT while passing the impugned order, only prime allegation against the petitioner society is that the proofs of the expenses made by it have not been produced or the books of accounts have not been properly maintained. This Court finds that the use of donations/funds by renowned Society/Trust already working for the charitable purposes, should not be discarded from seeking exemption merely on technicalities, such as production of the receipts/entries. Position could be said differently had there been any allegation of using the donations/funds for personal gains, profits or otherwise. Even there is no specific finding recorded by respondent No. 1 CIT that the petitioner society has failed to meet out its aims and objects. Neither, there is any denial, nor any adverse observation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner Society and proceed to grant renewal of registration under Section 80G (5) (vi) of the 1961 Act. Accordingly, the writ petition is allowed. - HON BLE MR. JUSTICE SANJEEV PRAKASH SHARMA AND HON'BLE MR. JUSTICE SANJAY VASHISTH Present: For the Petitioner : Mr. Pankaj Jain, Senior Advocate, with Ms. Divya Suri, Advocate, and Mr. Sachin Bhardwaj, Advocate,. For the Respondents : Mr. Amanpreet (A.P.) Singh, Advocate, Senior Standing Counsel,. SANJAY VASHISTH, J. 1. By filing the instant writ petition, the petitioner, namely, Mumukshu Mandal (Regd.) Shri Geeta Mandir, Panipat, has assailed the order dated 20.03.2006 (Annexure P-1), passed by respondent No. 1 Commissioner of Income Tax, Karnal (CIT), whereby the petitioner has been denied registration under Section 80G (5) (vi) of the Income Tax Act, 1961 (for short, the 1961 Act ), for deduction out of total income on donation to be made available to donors on the basis of such registration. 2. The petitioner is a Society duly registered under the Societies Registration Act, 1860, vide Registration Certificate No. 45 of 1973-74, dated 2.11.1973 (Annexure P-6), and engaged in the social/charitable activities, especially f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lain when there is no balance sheet for Panipat then how the Head Office of the society is being run from Panipat. ii) There is a lot of overwriting in cash book of current financial year. Asked to explain the reasons for the same. iii) To produce the bank statement of all the branches for the current year. iv) How much amount has been spent on Bhandra and other charitable purposes during the last five years? v) The exemption granted to the society u/s 80G (5) expired on 31.3.2005 but the society continued to mention on the donation receipts issued after 31.3.2005 that it enjoys exemption u/s 80G (5), whereas, application for renewal was filed on 23.9.2005. Asked to explain the reasons for the same. vi) To produce the donation receipt books for Vrindavan office. vii) The society has raised bank loan against FDR on 28.1.2006. In this connection, requested to produce the pass book/bank statement of PNB account No. 16024 alongwith purpose of loan taken. viii) Where the donations are substantial such as Rs. 1,31,000/- vide receipt No. 1120 dated 8.2.2005 by Dr. Neelima Sangla, Chandigarh and source PAN of the donor is not given nor confirmation from the donor has been filed, the societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re being maintained which are as under: - i) Geeta Kuteer, Tapovan, Haridwar. ii) Geeta Dham, Kurukshetra. iii) Anoopyati, Geeta Ashram, Vrindavan. ii) That in compliance to notice dated 23.1.2006, the assessee was required to produce account books on 31.1.2006 when none attended. However, a telegram was received seeking adjournment. Vide this office notice dated 3.2.2006, the assessee was again required to make necessary compliance on 15.2.2006. Again on 15.2.2006 a letter received in DAK with a list containing names and amounts of the persons who stated to have made donations. Since no compliance as required in various letters for producing account books/vouchers made, again notice was issued on 17.2.2006 for compliance on 27.2.2006. On 27.2.2006, neither any one attended nor reply filed. Accordingly, summons u/s 131 of the Act were issued on 28.2.2006 for compliance on 7.3.2006 at 10.30 AM for producing account books and vouchers for the financial year 2003-04 and 2004-05. However, the compliance to the summons, S/Sh. Ravinder Mehta, Advocate attended alongwith Ram Kishan Phagwal and produced account books/vouchers for the financial year 2004-05 which have been examined. iii) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sangat Nabha Punjab 6000/- 13. 616 1.3.2005 Ram Parkashji, London 5000/- 14. 09 7.6.2004 Satish Gulati, Delhi 7000+250 15. 90 31.7.2004 Name not mentioned 11000/ Some receipts were also issued for the amounts stated to be received from Dan Partas for instance: 395 30.5.2004 Bhagwan Banke Bhhari ke Dan Patra se prapat 113487/- 860 28.10.2004 -do- 105418/- A perusal of ledgers maintained for all the three branches was also revealed that in regard to donations received, no names and address of donors mentioned in 'particular' column and only date CB folio and amount have been mentioned. vi) That the assessee society has made construction during the year for which the bills raised by the contractors or other bills pertaining to construction not produced for verification. Ledger account of Luxman Stone Center examined. During the year Rs. 37200/- paid to him and on 31.3.2005 his account was credited with the same amount by transfer entry by making Nil balance. No bills raised by this person. Similarly, the ledger account of M/s Sumitra Builders was debited with payments of various amounts on various dates during the year totaling to Rs. 26,72,029/- at the close of the year. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order, Mr. Pankaj Jain, learned Senior counsel submitted that the petitioner society is admittedly registered under Section 12AA of the 1961 Act, which is meant for registration of the Society/Establishment/Trust working of which is meant for social welfare. Therefore, primarily there is no such reason for the respondents to disbelieve the expenditure made by the petitioner society from the donations received by it from time to time. Further submits that the petitioner - society is also registered under the Societies Registration Act, 1860, with specified aims and objects since 24.08.1978. As per the aims and objects, the petitioner society is meant to work for establishment of educational institutions, dharmshalas, goshalas, orphanage homes for destitute, old age and infirm people, as well as other objects of general public utilities, not involving any activity for profit. After registration under the Societies Registration Act, for the purpose of seeking exemption under the 1961 Act, the petitioner society got the registration certificate under Section 80G since 1974, by citing same set of facts and circumstances. Thereafter, exemption certificate was got renewed from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oupled with a duty. We may now examine the case in hand on the touchstone of the aforenoted broad principles. In the instant case, the CIT has not found that the objects of the petitioner-society, established in India, as set out in its memorandum of association, are not for a charitable purpose or that the society is not carrying on its activities in furtherance of its objects. As a matter of fact, registration of an institution under Section 12A (a) of the Act by itself is a sufficient proof of the fact that the trust or the institution concerned is created or established for charitable or religious purposes...... For the foregoing reasons, we are of the view that the impugned order of the CIT refusing approval to the petitioner-society under Section 80G of the Act is founded on irrelevant considerations and, therefore, cannot be sustained. Consequently, we allow the writ petition, make the rule absolute, quash the impugned order and direct the CIT to take a fresh decision on petitioner s application in accordance with law. There will, however, be no order as to costs...... Thus, submitted that respondent No. 1 CIT has an ample power for satisfying itself to the effect that detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998) . Thus, there cannot be anything to declare that the order is not worth to sustain. 14. After hearing both the sides in detail and especially by going through the report dated 17.03.2006, submitted by the Assistant Commissioner of Income Tax, Circle, Panipat, coupled with the judgement rendered by this Court in the case of Sonepat Hindu Education and Charitable Society (supra), we find that there is sufficient substance in the arguments advanced by learned Senior counsel for the petitioner society. The judgement passed by the Delhi High Court in Kirti Chand Tarawati Charitable Society (supra) was on the facts of said case. However, it cannot be said that the law has been laid down that investment by a charitable organisation for public purposes, which are incidently for the charitable purposes, cannot be a ground to deny registration under Section 80G of the 1961 Act. 15. Neither in the report dated 17.03.2006, submitted by the Assistant Commissioner of Income Tax, Circle, Panipat, nor in the impugned order dated 20.03.2006 (Annexure P-1), passed by respondent No. 1 CIT, there is a categoric discussion or specific finding that the donations/funds received by the petitioner so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of charitable functions. In the opinion of this Court, the construction of Public Library would also form part of charitable function and any work done with the same purpose has to be noticed for granting exemption under Section 80G of the 1961 Act. It was also submitted that certain sources of donations could not be traced, however, the same would not in any manner deprive the petitioner Society for getting exemption under Section 80G of the 1961 Act and, for such donations alone the matter can be examined separately. 18. We also find that recently Hon ble the Supreme Court while considering the requirement of continuing registration for an educational trust, in the case of M/s New Noble Educational Society v. Chief Commissioner of Income-tax, (2023) 6 SCC 649 , has proceeded to hold that the word solely would also mean that the ancillary work which may be carried out by the Society for the purpose of enhancing education, would also be treated as work done for charitable purpose. In the present case the amount of Rs. 30,00,000/- has been utilised for construction of Public Library, and the same would have to be treated as a work done for charitable purpose. 19. At this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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