TMI Blog2010 (4) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption under section 11 in respect of application of funds on fixed assets. The trust had also claimed depreciation on capital assets, which were acquired by it. The ld. CIT, therefore, was of the view that the assessee had claimed double deduction on account of application of funds on fixed assets and the other on account of depreciation. The ld. CIT relying on the decision of Hon ble Supreme Court in the case of Escorts Ltd. v. Union of India [1993] 199 ITR 43 observed that double deduction in regard to the same business outgoings was not intended by the Legislature unless clearly expressed. He was, therefore, of the opinion that the depreciation claimed by the assessee would be includible in its total income. Since the assessee had claimed double deduction, this would disqualify the trust for approval under section 80G(5)( vi ) of the Income-tax Act, 1961 due to non-compliance of clause ( i ) of sub-section (5) of section 80G of the Act. 3. The ld. Commissioner further noted that the assessee was collecting anonymous donations. The details submitted showed that Rs. 6,42,800 was collected in financial year 2006-07 for which receipts were issued without giving any name a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance on the decision of Hon ble Karnataka High Court in the case of Gajamnagappa Sons Trust v. DIT (Exemption) [2004] 269 ITR 59 wherein it has been held that grant of exemption was subject to the satisfaction of the authority with regard to the renewal. The ld. Commissioner, accordingly, was of the view that the trust was not entitled for renewal of exemption under section 80G, read with rule 11AA of the Income-tax Rules, 1962. 4. Before us, the ld. AR of the assessee submitted that at the time of grant of registration, the ld. Commissioner is not supposed to act as Assessing Officer. What is to be seen at the time of renewal of registration under section 80G is whether the objects and activities of the trust were charitable. The trust was registered under section 12A in 1986 and registration had been granted under section 80G for several years till 31-3-2009. As regards the expenditure incurred on Mandir Pooja, it has been submitted that the ld. CIT has considered the net income from Gaushala whereas the actual income from Gaushala was Rs. 22,30,771. If the donations received in Gaushala is taken with interest receipt the total income comes to Rs. 48,68,989. The ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such income would not be liable to be inclusion in his total income under provisions of sections 11 and 12 or clause ( 23AA ) or clause ( 23C ) of section 10 subject to conditions specified in proviso to this clause; ( ii ) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; ( iii ) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; ( iv ) the institution or fund maintains regular accounts of its receipts and expenditure; ( v ) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 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 recognized by the Government or by a University established by law, or affili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had claimed double deduction in respect of same assets or the income had not been applied to the extent of 85 per cent of the income for the objects of the trust would not be relevant at the time of granting of registration or renewal of registration under section 80G of the Act. Hon ble Punjab Haryana High Court in the case of Sonepat Hindu Educational Charitable Society ( supra ) has held that in construing the purpose of a trust for the purposes of approval under section 80G of the Income-tax Act, 1961 it is important to find out the real purpose of establishing the trust rather than just relying on the objects, memorandum and articles or the trust deed of the Trust. If the Commissioner is satisfied that the objects of the trust are charitable, approval should not be denied on mere technicalities. Registration of an institution under section 12A of the Act is sufficient to of its being established for charitable purposes. In the instant case, the objects of the trust are charitable in nature and, accordingly, the ld. Commissioner was not justified on denying the continuation of registration under section 80G when the assessee had enjoyed such benefit for last 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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