TMI Blog2005 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that the impugned order of the Commissioner refusing approval to the petitioner-society under section 80G is founded on irrelevant considerations and, therefore, cannot be sustained - - - - - Dated:- 31-5-2005 - Judge(s) : D. K. JAIN., HEMANT GUPTA. JUDGMENT The judgment of the court was delivered by D.K. Jain C.J.- Rule DB. With the consent of learned counsel for the parties, we take up the matter for final disposal at this stage itself. The petitioner is aggrieved by order dated July 8, 2002, passed by the Commissioner of Income-tax, Rohtak, whereby its application dated January 16, 2002, seeking renewal of exemption under section 80G of the Income-tax Act, 1961 (for short, "the Act"), has been rejected. The petitioner, a society registered under the Societies Registration Act, 1860, was incorporated on February 22, 1961, with the avowed objects of establishing educational institutions anywhere in India; to contribute funds to any existing or future educational institutions, universities or gurukuls and to acquire property of every description for any one or some of its objects, etc. However, subsequently in the general body meeting of the society held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for registration under rule 2CA(3) on October 5, 2000, but the same is still pending. The petitioner also made an application for grant of approval under section 80G(5)(vi) of the Act, which was inserted in the statute book with effect from October 1, 1991. The petitioner was granted the said approval from 1991 to 1994. The approval was again granted from April 1, 1994 to March 31, 1999. It is pleaded that even prior to October 1, 1991, the petitioner-society had been regularly allowed exemption under section 80G of the Act, though the same was not required under the statute. As noted above, vide its application dated March 16, 1999, the petitioner again applied for approval, which should have been otherwise valid for 5 years, i.e., March 31, 2004, but having failed to get any response, the petitioner again, applied on January 16, 2002, for further necessary approval, which has since been refused by the impugned order. Hence, this petition. The petition is resisted by the respondents. In the written statement filed on behalf of the Commissioner, the rejection of the petitioner's application is sought to be justified mainly on the grounds that: (i) The society should have appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted up to March 31, 1999 even after the objects were rearranged and therefore, the said objection is meaningless at this stage. As regards notification under section 10(23C), it is averred that the petitioner's application under section 10(23) of the Act is pending for the last more than three years and in fact, it is deemed to have been granted in terms of rule 2CA(3) of the Rules and therefore, one of the conditions laid down under section 80G(5)(i) of the Act also stands complied with. We have heard Mr. P.C. Jain, learned counsel appearing for the petitioner-society and Mr. Rajesh Bindal, learned standing counsel for the Commissioner. Under section 80G of the Act, a donor can claim deduction in computing his total income in respect of donations made by him to various funds or institutions mentioned in sub-section (2) of the said section. It is section 80G, which envisages deduction in respect of the donations made by a person who, but for the provisions, cannot claim any such deduction because the donations are not considered to be expenses incurred for the purpose of earning income. In the list of funds or institutions, donations of which could qualify for deduction from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a university established by law; or is any other educational institution recognised by the Government or by a university established by law, or affiliated to any university established by law, or is an institution approved by the Central Government for the purposes of clause (23) of section 10, or is an institution financed wholly or in part by the Government or a local authority; and (vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commissioner in accordance with the rules made in this behalf; Provided that any approval shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval." The afore-extracted sub-section (5) of section 80G helps to identify the funds or institutions, donations to which qualify for deductions under that section, provided that the funds or institutions, referred to in sub-section (2)(a)(iv) are such whose income would not be liable to be included in its total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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. Furthermore, as noted above, the grounds which have weighed with the Commissioner to negative the petitioner's claim is that it should have applied for fresh registration under section 12A(a) of the Act because of change in its objects on September 17, 1989; its memorandum should have been got amended as per the procedure prescribed in section 92 of the Civil Procedure Code; the petitioner's institution has not been notified under section 10(23C) of the Act for the assessment year 2000-01; separate books of account should have been maintained for purchase and sale of books and it had spent substantial amounts as entertainment expenditure on visitors and examiners, but no supporting evidence had been produced. We are of the opinion that, in view of the fact that the petitioner had enjoyed approval under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the said purpose relates to whether the applicant is registered under section 12A; whether it is a trust wholly for charitable purposes and whether the income received by it is liable to be considered under section 11 of the Act. The enquiry whether at the end of the previous year, the donor will be able to sustain a claim because of non-fulfilment of some conditions by him would depend at the close of the relevant previous year, as it is not possible to predicate these conditions in praesenti when the donation is made. In so far as exemption under section 10(23C) of the Act is concerned, for the view we have taken above on the application of sections 11 and 12 of the Act, exemption under the said provision would not be necessary to make the petitioner eligible for approval under section 80G. None the less, it is stated that the application for claiming exemption under the said provision is also pending for the past few years. For the foregoing reasons, we are of the view that the impugned order of the Commissioner refusing approval to the petitioner-society under section 80G of the Act is founded on irrelevant considerations and, therefore, cannot be sustained. Consequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
