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TMI Blog2014 (2) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... trust in the uncontrolled discretion of the trustees. He further was of the view that clause 6(b) of the trust deed authorises to use the trust properties and its income including fees, charges etc., in the manner trustees think fit. He further noted that objects mentioned in sub clauses (f),(k) & (s) of clause-2 are of non charitable nature. This order of the DIT (E) was challenged before Income-tax Appellate Tribunal. The Income- tax Appellate Tribunal vide order dated 15-7-2008 in ITA No.1110/Hyd/07 dated 15-7-2008 remitted the matter back to the DIT (E) by observing that without bringing to the notice of the assessee the defects as noted by the DIT (E), he could not have rejected the application. The Tribunal therefore directed the DIT (E) to decide the issue afresh after giving reasonable opportunity of being heard to the assessee keeping in view the decision of the Hon'ble Rajasthan High Court in the case of Umaid Charitable Trust vs. Union of India. Pursuant to the direction of the Income-tax Appellate Tribunal, the DIT (E) again initiated the proceedings by issuing a notice to the assessee. In response to the notice issued by the DIT (E), as it appears from record, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 80G(5)(vi) of the Act. 4. The DIT (E) further noted that from the copies of the accounts of the assessee furnished for different financial years, it would be noted that the assessee has not truthfully maintained its receipts and expenditure during different years. He further mentioned that as per the details of donations paid during the year 2009-10, the assessee has paid only single donation of Rs.15,000/- to one Ms. P. Khairoon vide cheque No.343285 dated 11-3-2010 whereas from the bank account statement of the assessee in Axis Bank Limited, for the period from 1-4-2009 to 31-3-2010, it was noted that the assessee has also paid a sum of Rs.30,000/- to one Akshara Foundation. He further noted that the assessee has paid Rs.1,03,000/- to the said Akshara Foundation on 20-3-2010 through cheque as per the said bank statement. He noted that the assessee had made a total amount of Rs.1,33,000/- to Akshara Foundation to whom it had earlier paid donations of Rs.4,000/- during financial year 2007-08. He noted that the said amount paid to that Institution has not been shown in the statement of donation furnished by the assessee for the year 2009-10 and they are also not reflected in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure account of that year. In this context, the learned AR drew our attention to summary of such details taken from the audited income and expenditure account showing the expenditure of Rs.3,20,160/-. He further submitted that the income and expenditure account for the year ended on 31-3-2010 which is part of the audited balance sheet in financial year 2009-10 shows the amount of Rs.30,000/- paid to Akshara Foundation on 18-2-2010 and further amount of Rs.1,05,000/- paid on 20-32-2010 totalling Rs.1,35,000/- towards fellowship. The details of such payment made were submitted before us. He further submitted that Akshara Foundation is a charitable trust registered u/s 12AA of the Act and hence amounts paid as donation to Akshara Foundation is also an application of income towards charitable purposes. In this context, the learned AR relied upon a decision of Income-tax Appellate Tribunal, Hyderabad Bench in case of YVS Bhanumurthy & Vijayalakshmi Charitable Trust in ITA No.169/Hyd2010 dated 1-7- 2010. The learned AR submitted that the amount of Rs.4000/- paid as donation to Akshara Foundation during the financial year 2007-08 is also reflected in the list of donation/charity. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR, on the other hand, supported the order of the DIT (E). 8. We have heard the parties and perused the materials on record. As can be seen from materials on record in the earlier round, the renewal of approval was rejected on the ground that clause-7 of the trust deed gives unbridled power to the trustees to apply funds and income of the trust according to their own discretion. It was further held therein that some of the activities in the object clause are of non charitable nature. It is a fact on record that the assessee thereafter has made amendments to clause-7 and also made some other amendments to trust deed which has been registered with the Sub-Registrar. As can be seen from the impugned order of the DIT (E) the grounds on which the DIT (E) earlier rejected the application appears to have been removed as the DIT (E) has not referred to those defects/deficiencies while rejecting the application for seeking renewal of approval. As can be culled out from the order of the DIT (E), the assessee's application in form 10G has been rejected broadly on the following reasons:- i) There is no stipulation for making donation to other institutions in the trust deed. Since the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wship which also finds place in the details of donations as taken from the audited income and expenditure accounts. Though of course instead of mentioning the name of Akshara Foundation, name of beneficiaries has been mentioned. Therefore, the allegation of DIT (E) appears to be unfounded. Similarly, so far as the allegation that it has not been reflected in the balance-sheet is concerned, the same is also not correct as it could not have been mentioned in the balance-sheet since the amount has been debited to the Profit & Loss A/c. So far as the third allegation of the DIT (E) with regard to the advance of Rs.5 lakhs to Akshara Foundation is concerned, we are of the view that the DIT (E)'s conclusion is based on presumptions and surmises. It is very much evident from the order of the DIT (E), he himself admit that the amount of Rs.5 lakh had been shown in the balance-sheet as advance to Akshara Foundation. Therefore, when the amount of Rs.5 lakh has been reflected in the income and expenditure account which forms part of balance-sheet it cannot be said that the assessee has not maintained regular accounts of its receipts and expenditure in terms of clause(iv) of section 80G(5). La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e both cash credits and repayments, the Assessing Officer cannot consider the cash credits alone ignoring the repayments. He held that in that situation only the peak credit can be considered for peak credit was found to be Rs.47,50,000/-, the CIT (A) held that only amount of Rs.47.50,000/- can be considered for addition. The CIT (A) further held that since in the previous assessment year peak credits of Rs.50,00,000/- was added to the income of the assessee, the said amount is available for assessment year 2005-06. Accordingly, the CIT (A) deleted the entire addition. On a perusal of the statement showing receipts and repayments at page 35 of the paper book, it is to be noted that peak credits as on 8-6-2004 is Rs.47,50,000. Therefore, when there are both receipts and payments only receipts cannot be considered totally ignoring the repayments. In such situation only the peak amount is to be considered. Further, it is a fact that peak credits of Rs.50 lakhs added to the income of the assessee in the assessment year 2004-05 was available with the assessee for telescoping. In these circumstances we do not find any reason to interfere with the j fining of the CIT (A) which is accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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