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TMI Blog2012 (5) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... od after 31.3.2009. The assessee was, earlier, allowed approval u/s 80G for the period 01.04.2008 to 31.03.2009 vide order dated 15.10.2008. The assessee society was registered u/s 12A of the Act on 18.1.2007 in terms of their application for registration filed on 7.7.2006. During the course of hearing of the application for approval u/s 80G, the ld. CIT noticed that the applicant society running a school, had reflected building worth Rs. 1,57,80,444/- in their balance sheet, which was constructed on the land taken on lease from the persons covered u/s 13(3) of the Act and the assessee paid only rent of Rs. 3,000/-pa in all @ 1,000/- per annum to the lessors i.e., Shri Anil Kumar Sharma, Shri Brij Bhushan Sharma and Jag Mohan Sharma, all brothers of chairman & Mrs. Santosh Sharma wife of Son of Shri Anil Kumar Sharma, & Mrs. Indra Sharma. The said lease was for 30 years and in the event of vacation of the land by the society, it was entitled to demolish the property and take the malba of the same along. Since the explanation furnished by the society was in violation of provisions of the Act and according to the CIT, the society passed on huge income in favour of the founder trustee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 10(23C)(iiiad) has been denied . Even when the registration u/s 12A of the Act has not been withdrawn, the ld. CIT declined to renew the approval u/s 80G(5)(vi) of the Act for the period after 31.3.2009 on the ground that land on which building was constructed by the society ,belonged to persons covered u/s 13(3) of the Act. However the alleged benefit granted by the society to the aforesaid persons i.e. Shri Anil Kumar Sharma & Mrs. Santosh Sharma wife of Son of shri Anil Kumar Sharma, Shri Brij Bhushan Sharma, Mrs. Indra Sharma and Jag Mohan Sharma, has not been quantified nor ever appears to have been brought to tax in any of the AYs 2000-01 to 2009-10. The ld. AR, on the other hand, contended before us, that in fact society has benefited from the land leased out by the aforesaid persons on a nominal rent. Before proceeding further, we may have a look at the relevant provisions of sec. 80G(5) of the Act, which read as under: "(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely:- (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. 4.1 The relevant provisions of Rule 11AA read as under: "(1) The application for approval of any institution or fund under clause (vi) of sub-section (5) of section 80G shall be in Form No.10G and shall be made in triplicate. (2) The application shall be accompanied by the following documents, namely:- (i) Copy of registration granted under section 12A or copy of notification issued under section 10(23) or 10(23C); (ii) Notes on activities of institution or fund since its inception or during the last three years, whichever is less; (iii) Copie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hon'ble Gujarat High Court in the case of N.N. Desai Charitable Trust (supra) held that the ld. CIT cannot act as Assessing Officer. The enquiry should be confined to find out if the institution satisfies the prescribed conditions and the actual assessment of the institution would not affect the claim for registration under section 80G of the Act. A co-ordinate Bench in the case of Kalyanam Karoti v. CIT [2010] 123 ITD 317 (Luck.) held that while granting recognition under section 80G(5) or continuation thereof, the Commissioner has only to seek whether the society fulfils conditions laid down in clauses (i) to (v) of section 80G(5) and not whether certain receipts, i.e., voluntarily donations are properly explained or not. We are of the opinion that the registration of a charitable trust or society under section 12A(a) of the Act is not an idle or empty formality. Once the registration under s. 12A(a) of the Act is granted, the grant of benefit cannot be denied, especially when the facts and circumstances are the same as in earlier years since grant of registration u/s 12A of the Act. Even otherwise, registration granted to the assessee as a charitable society is subsisting and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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