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2015 (8) TMI 17 - KARNATAKA HIGH COURT

2015 (8) TMI 17 - KARNATAKA HIGH COURT - [2015] 379 ITR 450 (Kar) - Continuation of the approval granted under Section 80G(5)(vi) rejected - assessee submision that Commissioner as well as Tribunal erred in not considering the fact that assessee - Trust had not carried on any activity which was hit by proviso to Section 2(15) of the Act and reply given to the respondent indicated that donations which had been received by the assessee had been utilised for the purpose envisaged under the objects .....

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cating that it had taken steps to fulfill the objects of the Trust by not only constructing 'Samudaya Bhavana' but also medical treatment said to have been given by its 'Mumbai Samithi' apart from distribution of books to the needy, are all aspects which was required to be examined by respondent and said exercise having not been undertaken, we are of the considered view that matter requires to be remitted to the respondent for being adjudicated afresh - Decided in favour of assessee. - ITA No. 6 .....

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come Tax, Mangalore who had rejected the assessee's application filed under Section 80G of the Income Tax Act, 1961 (for short 'Act') came to be affirmed. 2. Appellant (hereinafter referred to as 'assessee') is a society registered under the Karnataka Societies Registration Act, 1960. It was granted registration under Section 12A and also approval under Section 80G(5)(vi) of the Act with effect from 17.02.2004 to 31.03.2005. Thereafter, continuation of the approval granted un .....

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We have heard the arguments of Smt. Jineetha Chatterjee, learned Advocate appearing on behalf of Sri S Parthasarathy for appellant - assessee and Sri E.I.Sanmathi, learned Advocate appearing for Respondent - Revenue. 4. It is the contention of Smt Jineetha Chatterjee , learned Advocate appearing for the appellant - assessee that respondent was not justified in rejecting the application for continuance of recognition granted to appellant under Section 80G(5)(vi) of the Act without examining as t .....

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by the assessee had been utilised for the purpose envisaged under the objects of the Trust and its fulfillment. Non-consideration of said vital evidence available on record by the respondent has resulted in miscarriage in the administration of justice. Hence, she prays for answering the substantial questions of law formulated in the appeal memorandum in favour of the assessee and against the revenue. 5. Per contra, Sri E.I.Sanmathi, learned Advocate appearing for the revenue would support the or .....

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ubstantial question of law: "(a) Whether the Tribunal was justified in alleging that, mere construction of a building for the purpose of carrying out of activities for the advancement of any objects of general public utility like providing venue for public meeting to promote unity of brotherhood would not constitute charitable activity to deny continuance of approval under Section 80G(5)(vi) of the Act? (b) When Appellant has granted registration under Section 12A and also approval under Se .....

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ncerning advancement of object of general public utility as provided under Section 2(15)? (d) Whether the proviso to Section 2(15) of the Act would apply to justify the denial of continuance of approval under Section 80G(5)(vi) of the Act when the construction of building for carrying out of the object of the Society was under progress?" 7. Having heard the learned Advocates appearing for parties and on perusal of the records, it would emerge that assessee -Trust was granted registration un .....

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filing detailed objection, copy of which has been made available by the learned Advocate appearing for the assessee during the course of arguments. Subsequently, the Commissioner vide order dated 28.11.2008 (Annexure-G) rejected the application for continuation of the recognition. 8. Perusal of the said order dated 28.11.2008 which is at Annexure-G would indicate that there is neither consideration of objections filed by the assessee for rejecting the application of assessee nor the respondent h .....

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e no reasons forthcoming as to why order of rejection is sustained, except making a passing reference to the fact that construction of the building by the assessee would by itself not constitute granting of relief for the poor or it would be sufficient to hold such activity would amount charitable purpose. It is not in dispute that registration granted to the respondent-assessee under Section 12A of the Act is in force or vogue as on date and the Commissioner while examining the application for .....

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tion 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) Copies of accounts of the institutions or fund since its inception or during the last three years, whichever is less. (3) The Commissioner may call for such further documents or information from the institution or fund or cause such inquiries to be made as he may deem necessary i .....

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itions laid down in clauses (i) to (v) of sub-section (5) of Section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing: Provided that no order of rejection of an application shall be passed without giving the institution or fund an opportunity of being heard. (6) The time limit within which the Commissioner shall pass an order either granting the approval or rejecting the application shall not exceed six months from the .....

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cate obtained under Section 12A and copies of its accounts since inception or last three years, whichever is less and in the event of Commissioner not being satisfied with the details furnished by the applicant, he is empowered under sub-rule (3) of Rule 11AA of the Rules to call for further documents or information from the institution or fund or cause such enquiry as he deems necessary in order to satisfy himself the activities of the institution or fund is genuine. After calling for such info .....

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