TMI Blog2012 (3) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... e 11AA as also in sub-clauses (i) to (v) of sub-section (5) of section 80G are complied with, the trust is, eligible for registration under section 80G(5)(vi) of the Act - the assessee has already made amendment to the trust deed amending Clause 3.2 - no objection to grant approval – appeal of assessee allowed - IT APPEAL NO. 1343 (HYD.) OF 2011 - - - Dated:- 3-2-2012 - CHANDRA POOJARI, SMT. ASHA VIJAYARAGHAVAN, JJ. Y. Ratnakar for the Appellant. T. Diwakar Prasad for the Respondent. ORDER Chandra Poojari, Accountant Member This appeal preferred by the assessee is directed against the order passed by the DIT (Exemptions), Hyderabad dated 25-05-2011. 2. The grievance of the assessee in this appeal is with reference to denial of granting of approval under section 80G of the Act. The assessee's request for approval under section 80G of the Act was rejected by the DIT(E) on the reason that the trust deed contains object clause that his objects are not confined to India alone and can be conducted outside Indian Territory. The learned authorised representative submitted that the assessee is not contravened any of the terms and conditions set out in section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts cannot afford medical aid. The assessee has registered itself with children's hospital. Whenever a child is admitted into such hospitals in a critical condition and the parents are unable to afford the cost of the medical treatment for want of funds for treatment the hospital refers the said case to the trust. One of the trustees thereupon visits the hospital, satisfies that the parents cannot afford medical treatment and upon being satisfied of the genuineness of the case, takes up the matter with the hospital and undertakes on behalf of the trust to bear the entire cost of the treatment for the child. In such cases sometimes even the hospital agrees to reduce partially the cost of the treatment. Thereafter the trust releases the funds and pays the same to the hospital for the treatment of the child. ( ii ) The children who are economically poorer sections of the society and the medical aid are given without any discrimination of religion, sex, community, colour, creed, etc. The first year for the trust ended on 31st March, 2011. During this period, the trust collected donations aggregating to Rs. 26,02,123/- and provided treatment to children at an expense 10,79,251/-. It al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Trust survives only on donations and has no other means of income. If the approval under section 80G is not given and withheld the activities of the Trust will be seriously impaired and the Trust cannot carry on its objects effectively. The Trust is unable to give any 80G exemption certificates to the donors who have donated moneys in the financial year 2010-11. 5.1 Finally, he drew our attention to the certificate of granting registration under section 12AA of the Act dated 24-2-2011 and the registration was granted with effect from 07-06-2010. 6. On the other hand, the learned departmental representative submitted that granting of approval under section 80G is not automatic and grant of registration under section 12AA of the Act does not automatically reach to the conclusion that the assessee is entitled for approval under section 80G of the Act. Hence, the ld. DR has supported the order of the DIT(E). 7. We have carefully considered the relevant facts, arguments advanced and the case laws cited. The assessee is seeking registration under section 80G(5) of the Act. Section 80G(5) is extracted hereunder:- "(5) This section applies to donations to any institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, the institution or fund is for the time being approved by the Commissioner in accordance with the rules made in this behalf and ( vii ) where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,- ( a ) established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and ( b ) approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009. As per sub-clause (vi) of sub-section (5) of section 80G, for recognition, the trust is required to be approved by the Commissioner in accordance with the Rules made in this behalf. The Rules are Rule 11AA prescribed in this regard. As per Rule 11AA, the assessee is required to make an application in Form No.10G. The application shall be accompanied by the following documents:- (1) Copy of Registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure is also complied with. 11. The condition in sub-clause (v) of sub-section (5) of section 80G is that the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1960. 12. From the above it is clear that all the conditions laid down in Rule 11AA i.e. condition laid down in sub-clauses (i) to (v) of sub-section (5) of section 80G are fulfilled. When the assessee trust was granted registration under section 12AA, it is a testimony to the fact that the trust is established for charitable purposes. Hon'ble Punjab Haryana High Court which is the jurisdiction in this case in the case of Sonepat Hindu Educational Charitable Society v. CIT [2005] 278 ITR 262/147 Taxman 1 held as under:- "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 technicaliti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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