9911796707
Advanced Search 
TMI Blog2009 (6) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... nition under s. 80G was rejected by the learned Director of IT (Exemption) for the reasons set out which has been summarized as under: (i) though the trust had collected Rs. 32.47 lakhs in financial year 2004405 alone, the trust claimed to have set apart Rs. 23.53 lakhs without application of funds in the relevant financial year for the objects of the trust; (ii) the accumulation however was in excess of 15 per cent as required under s. 11 (1)(a) of the Act. Similar accumulation had also been made for the financial year 2005-06. Thus the requirements of s. 11(2)(a) have not been met; (iii) the trust had neither sought the AO's permission for accumulation of funds nor was there a mention in the relevant columns of Form 10G; (iv) Audit report for financial year 2004-05 does not show 'the specific purpose' for accumulation. Mere reference made to cl. 28 of the general objects which has 15 clauses doesn't meet the test of specificity; (v) Reliance was placed in the case of Director of IT (Exemption) vs. Trustees of Singhania Charitable Trust (1993) 199 ITR 819 (Cal) and another case law CIT vs. Nagpur Hotel Owners' Association (2001) 165 CTR (SC) 1 : (2001) 247 ITR 201 (SC); (vi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption) had no authority to act in a prejudicial manner by way of review or reconsideration of the very same facts which were examined by predecessors; (v) Trust deed had not undergone any change or modification from the date of its execution and as such the Director of IT (Exemption) had no evidence to cast any such allegation of existence of business activity; (vi) the trust on 23rd Sept., 2005 had sought for accumulation till 31st March, 2010 as per law - as the law is very clear that application of accumulation need not be made every year-Cotton Textiles Export Promotion Council vs. ITO (2009) 117 ITD 90 (Mumbai); (vii) donations by way of cheques started coming from December, 2004 onwards and such receipts have been Rs. 32.47 lakhs during December, 2004-March, 2005; (viii) donations received in the last quarter of financial year 2004-05 relevant to the asst. yr. 2005-06 and the application of income could arise only in the subsequent financial year. During the financial years 2005-06 and 2006-07 the donations received and applied were Rs. 5 lakhs (applied Rs. 9.7 lakhs) and Rs. 4 lakhs (applied Rs. 1.20 lakhs) respectively; (ix) The trust had invested Rs. 3 lakhs as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the Director of IT (Exemption) in the matter. He has also furnished written submissions during the course of hearing. 5. We have carefully considered rival submissions and also perused their written submissions and other relevant documents. 5.1 Let us now look at the issue from legal angle. (i) The Hon'ble Supreme Court in the case of Radhasoami Satsang vs. CIT, has held thus: "That, in the absence of any material change justifying the Department to take a different view from that taken in earlier proceedings, the question of the exemption of the assessee appellant should not have been reopened. Strictly speaking, res judicata does not apply to income-tax proceedings. Though, each assessment year being a unit, what was decided in one year might not apply in the following year, where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to all the position to be changed in a subsequent year." (ii) In a recent judicial view. the Hon'ble Rajasthan High Court in the case of CIT vs. Malbor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be accumulated by the assessee to achieve the object for which the assessee was incorporated. It was not the case of the Revenue that any of the objects of the assessee-company were not for charitable purpose....." 5.2 We shall now peruse the case laws on which the learned Departmental Representative had placed reliance: (i) Hon'ble Kerala High Court's decision in (2002) 178 CTR (Ker) 79 : (2002) 258 ITR 395 (Ker) Charitable purposes-Donation for charitable purposes-Registration of trust under s. 80G-Condition precedent-Trust should qualify for exemption under s. 11-Investment of trust funds in violation of s. 13-Trust not entitled to registration under s. 80G. Since the present trust had qualified for exemption under s. 11 of the Act and the learned Director of IT (Exemption) had not brought on record in cogent manner to suggest that the trust had invested the trust funds in violation of s. 13 of the Act, the case cited is not applicable to the case on hand; (ii) Hon'ble High Court of Karnataka decision in Ganjam Nagappa & Son Trust vs. Director of IT (Exemption)-grant of exemption or renewal is not automatic in character. It is subject to the satisfaction of the authority w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
