Income Tax Appellate Tribunal - Amritsar
Seth Vinod Kumar Somani Charitable ... vs Commissioner Of Income Tax ... on 11 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR
BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND
SH.N.K.CHOUDHRY, JUDICIAL MEMBER
I.T.A. No.570(Asr)/2016
Assessment Year:2016-17
C
Seth Vinod Kumar Vs. CIT (Exemption),
Somani Charitable Trust, Chandigarh.
14, New Shakti Nagar,
Bathinda.
PAN:AAOTS-5900M
(Appellant) (Respondent)
Appellant by: Sh. J. K. Gupta, (Ld. CA)
Respondent by: Sh. Rahul Dhawan, (Ld. DR)
Date of hearing: 02.08.2017
Date of pronouncement: 11.08.2017
ORDER
PER N. K. CHOUDHRY:
The instant appeal has been filed by the assessee/trust on feeling aggrieved against the order dated 29th Sep. 2016, passed by the Ld. CIT(E), Chandigarh, whereby rejecting the request for grant of approval U/s 80G of the Act.
2. The assessee has raised the following grounds of appeal.
"1. That on the facts and in the circumstances of the case and in law, the learned CIT(Exemption) has erred in rejecting the application for 80G of the Income Tax Act, 1961 particularly when the assessee is registered u/s 12A of the Act.
2. That on the facts and in the circumstances of the case and in law, the learned CIT(Exemption) has taken into irrelevant consideration for rejecting the case of the assessee u/s 80G of the Income tax Act, 1961.2 ITA No.570(Asr)/2016
Asst. Year: 2016-17
3. That on the facts and in the circumstances of the case and in law, the learned CIT(Exemption) has erred in giving a finding that the trustees or other persons have claimed deduction u/s 80G of the Act without verifying the same from the returns of the trustees and other persons.
4. That in any case, the assessee is entitled to approval u/s 80G of the Act.
5. That any other relief may kindly be granted to the assessee to whom it is found entitled at the time of hearing of appeal."
3. The brief facts of the case are as under:
That an application U/s 80G(5)(vi) was filed by the applicant on 30.03.2016 and the CIT(E) was pleased to decline the approval U/s 80G of the Act by holding as under:
"(6) The response filed by the applicant were examined. From the same what transpires are following:
(i) It is seen that approx 50% of donations are from the trustees themselves and the contention of application that the same was corpus, donation for land building could not be accepted in the absence of the documentary evidence as regards to such directions which were being specifically called for. It is also pertinent to mention that most of the beneficiaries in the case of grant of 80G would be the trustees and their associates.
(ii) On perusal of Income & Expenditure for the F.Y. 2015-16 it is revealed that main expenditure is on account of student fees amounting to Rs.103275/- out of which a sum of Rs.37,000/- is spent on single child i.e Tania D/o Inderpal on different occasion such as Payment for Tuition to some Arora Classes, payment at SSD Girls college, Bathinda. Such one off acts do not qualify for charitable acts done on a systematic regular basis. Moreover no evidence is being provided as regards to the identity of the students to whom help is being provided.
(iii) On perusal of Balance sheet it is also revealed that main focus of the society is only on creation of land and building. This issue also gets exacerbated by the fact at the moment u/s 12AA was received by the society there was host of donations. No donations have come forth in the preceding years during which the trust was in existence. Moreover, taking of loan from M/s V.K. Cogin Mills, especially for the purpose of creation of building makes dear the main intent of the society and that being asset creation and not pursuing any of the state objects that have been professed.3 ITA No.570(Asr)/2016
Asst. Year: 2016-17
7. Keeping into view a l l , I a m of the considered view that the applicant hasn't been able to justify its quest for approval seeking exemptions on donations made to the entity. The real purpose at present seems to aim at making available tax exemptions to the trustees and their associates. The request for grant of approval u/s 80G is accordingly declined.
4. The assessee feeling aggrieved against the order passed by the Ld. CIT(E) preferred the instant appeal which is under consideration and submitted that the scope of enquiry by the Ld. CIT is very limited for grant of approval U/s 80G of the Act and once the registration of an institution U/s 12A of the Act has been granted then it is presumed that trust of institutions concerned is created or established for charitable and religious purposes. However, the Ld. CIT(E) has done the wrong enquiry, therefore, the same is liable to be set aside and in the result, the assessee is entitled to get the approval U/s 80G of the Act.
5. The Ld. DR, on the other hand, relied upon the order passed by the Ld. CIT(E) and submitted that the same is based upon well reasoning, logical and appropriate, therefore, does not deserve to be interfered with.
6. We have gone through with the facts and circumstances of the case as in the instant case the registration U/s 12AA was granted on satisfying the conditions laid down u/s 12AA(1) of the I.T. Act w.e.f 1st April, 2014 by the CIT(E) and the instant order under challenge has been passed on 29th Sep. 2014. It is an undisputed fact that till date, 4 ITA No.570(Asr)/2016 Asst. Year: 2016-17 registration u/s 12A of the Act has not been withdrawn, meaning thereby the assessee is engaged in the charitable activities until and unless, the assessee falls under non-fulfillments of one or more conditions satisfied in section 80G(v) of the Act and once the registration U/s 12A of the Act has been granted the approval u/s 80G should not be denied. Finally, in our considered opinion, once the registration u/s 12AA of the Act is an existence then the approval u/s 80G of the Act cannot be denied on flimsy ground until and unless the violation of the Rules specified in Section 80G of the Act occurred, therefore, we are inclined to grant registration u/s 80G of the Act to the assessee. Hence, the appeal of the assessee is allowed.
7. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open Court on 11.08.2017.
Sd/- Sd/-
(T. S. KAPOOR) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 11.08.2017.
/PK/ Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order