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2019 (5) TMI 837 - AT - Income TaxDenial of approval u/s 80G(5)(vi) - need of the assessee to seek donations, i.e., in view of its’ huge surplus and cash reserves - apprehension that the donations shall be misused as ground for denying the said approval - HELD THAT:- In the facts of the case, the ld. CIT(E) has based his decision of the donations being liable to be misused wholly on the basis of the assessee-society being prosperous and, consequently, in no apparent, or shown, need for donations to support its’ activities. While that may invite a charge of the promoters being over-zealous or over ambitious, it surely does not lead to the inference of seeking donation for admission, i.e., of the approval u/s. 80G(5)(vi) being liable to be misused a distinct possibility. This is particularly so as the same is in fact illegal, in view of the decision by the Apex Court as in TMA Pai Foundation v. State of Karnataka [2002 (10) TMI 739 - SUPREME COURT] referred to during hearing, emphasizing that the admission is in any case is to be merit based, and Modern Dental College and Research Center [2016 (5) TMI 1366 - SUPREME COURT]. Why should a management, in no dearth of funds, risk its’ reputation and, rather, even the future of its’ institution, by asking for such ill gotten money? Clearly, we are unable to regard the present case as one of ‘distinct possibility’ i.e., the test or the threshold which, in our view, must characterize the impugned transactions of donations which the applicant-appellant targets while seeking benefit u/s. 80G(5), so as to oust its’ case for being a eligible for approval thereunder. In our view, therefore, the assessee cannot be denied approval u/s. 80G. We, accordingly, setting aside the impugned order, direct the competent authority to grant the said approval. The assessee shall, however, give a legal undertaking to the Revenue that it shall not seek contributions, directly or indirectly, from persons who (or whose wards seek admission) to various educational or training institutions run, or may be run, by the assessee-society. - Decided in favour of assessee.
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