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TMI Blog2012 (3) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... ects will not be confined to India" does not in any way militate against the provisions of section 80G(5) of the I T Act. The said section does not state that if the activities are not confined to India, it is not entitled to approval under section 80G of Income-tax Act. It is contended that in any event, the assessee has not taken up any activities outside India and the said clause 'r' merely remained on paper and was never implemented. The trust has also no intention to take up activities outside India. It is further contended that the requirement is that the trust should be established in India. This requirement has been complied with, and there is no prohibition that if the activities as per the Trust Deed are not confined only to India, the approval should not be granted. It is contended that the CIT has read into section 80G of the Act and requirements which are not prescribed at all and the assessee contends that it is entitled to the approval under section 80G(5) of the Act. 3. The authorised representative of the assessee has further submitted that it is charitable institution registered under section 12AA of the Act. This appeal is filed against the order declining to gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to whom treatment is provided is enclosed for ready reference. (iii) The second financial year of the trust would be ending on 31st March, 2012 and the particulars of accounts of the Trust shall be furnished along with the return of income for the assessment year 2012-13. The Trust has become exceedingly popular and has gained a reputation for the services rendered by it in providing excellent medical relief to infants, at the best possible hospitals, where parents could not afford the treatment. All the children to whom the medical relief is provided are at Hyderabad only. Briefly the following are the activities undertaken by the trust. 4. Further, he submitted that that the provisions of section 80G are applicable provided it satisfies the conditions specified under clauses (i) to (v) of sub-section (5) to section 80G of the Income-tax Act. It is not the case of the DIT that any of the conditions specified in clauses (i) to (v) are not satisfied. The only provision relevant is the main limb of sub-section (5) which requires that the trust must be established in India for a charitable purpose. The said sub-section (5) does not stipulate that it must be established in India fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y :- [(i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA)] [or clause (23C)] of section 10 : Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if- (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business; (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 tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last 3 years whichever is less. (3) Copies of accounts of the institution since its inception or during the last 3 years whichever is less. 8. The Commissioner is empowered to call for such further documents or information or calls such enquiries in order to satisfy himself about the genuineness of the activities of the institution. If the Commissioner is satisfied that the condition laid down in clauses (i) to (v) of sub-section (5) of section 80G are fulfilled, he shall record such satisfaction and grant approval. If he is not so satisfied, he shall reject the application after recording the reasons. Thus as per the provision of section 80G(5) read with Rule 11AA for granting registration, the Commissioner needs to be satisfied that the condition laid down in clauses (i) to (v) of sub-section (5) of section 80G are fulfilled. In the present case there is no dispute that the application for approval has been filed in Form No.10G along with the documents required to be accompanied thereto. Sub-clause (i) of sub-section (5) of section 80G requires that where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation is made under section 80G, if the trust, which has sought approval under the said section, has fulfilled its conditions at the close of the relevant previous year. Res judicata can be applied in income-tax proceedings when a fundamental aspect has prevailed through different assessment years without being challenged one way or the other. In such cases it is not appropriate to change the position in a subsequent year." (Emphasis supplied) 13. There is no denial of fact that the assessee institution, in the present case, is registered under section 12AA of the Income-tax Act. Hon'ble Gujarat High Court in the case of N.N. Desai Charitable Trust v. CIT [2000] 246 ITR 452/123 Taxman 866 held that in respect of registration under section 80G, the scope of enquiry will be confined to finding out if the institution satisfies prescribed condition stated in sub-clauses (i) to (v) of section 80G. It does not extend to actual assessment of institution. The phrase used in sub-clause (i) of sub-section (5) of section 80G is that "where the institution or fund derives any income, such income would not be liable to inclusion in its total income". Thus what is to be seen is whether any i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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