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2016 (7) TMI 944 - ITAT JAIPUR

2016 (7) TMI 944 - ITAT JAIPUR - TMI - Approval u/s 80G(5) rejected - as per CIT(a) assessee has not started the activities as per the object - Held that:- Having granted registration u/s 12AA, the first condition regarding establishment of institution for charitable purposes is fulfilled. Regarding satisfaction of additional conditions specified in clause (i) to clause (v) of section 80G(5), there is no dispute as apparent from the order of the ld CIT. As can be seen from Revenue’s stand of rej .....

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t for establishment of the hospital and medical college, it cannot be said that assessee has not yet commenced any activity. The CIT has accepted that assessee has taken steps for implementation of its objects in as much as it has acquired the land, converted the land for institutional use for setting up the hospital project, appointed the architect., carried out soil testing etc. All these activities are towards the achieving the objects of the trust. The registration under section 25 of the co .....

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80G whereby the donations can be accepted for approved purposes and the project can be expedited. The approval under section 80G will thus aid and provide the necessary support in successful completion of the project. In our view, ld CIT (Exemption) was not correct in denying the approval under section 80G(5) to the appellant.- Decided in favour of assessee. - ITA No.679/JP/15 - Dated:- 26-4-2016 - SHRI VIKRAM SINGH YADAV, AM & SHRI LALIET KUMAR, JM For The Assessee : Shri P.C. Parwal (C.A.) .....

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object. 2. Briefly the facts of the case are that the assessee was incorporated on 25.05.2010 under the Companies Act, 1956 in the name of Hemdha Medi Resources Pvt. Ltd. It was given a license u/s 25 of the companies Act, 1956 on 13.10.2012 by the Registrar of Companies, Rajasthan. Thereafter , its name was changed to Hemdha Medi Resources and a fresh certificate of incorporation consequent upon the change of name was issued on 29.10.2012 by the Registrar of companies, Rajasthan. The main obje .....

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G(5)(vi) was rejected on the ground that as assessee is not registered u/s 12AA, it is not eligible for approval u/s 80G(5)(vi). 2.2 The assessee, thereafter again applied for registration u/s 12A and approval u/s 80G(5) on 25.06.2014. Registration u/s 12AA was granted to the assessee vide letter dated 14.11.2014. However, the application for grant of approval u/s 80G(5)(vi) was rejected on the ground that registration certificate u/s 12AA was not enclosed with the application. 2.3 The assessee, .....

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assessee vide letter dated 18.02.2015 filed on 01.06.2015. Again vide letter dated 19.06.2015 assessee submitted the status of working and activities done by it. 2.5 The CIT by perusing sec. 80G(5) r.w.r. 11AA held that at the time of grant of exemption u/s 80G(5), due important has to be given to the activities carried out by the organization and maintenance of accounts. However, no activities has been started by the assessee as per the objects and only capital expenditure like acquisition of l .....

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e in Form No. 10G and be accompanied by any of registration certificate u/s 12A, notes on the activities of the institution and copy of accounts of the institution of last three years. In the present case, all these requirements are fulfilled. The CIT has also accepted that assessee has taken steps for implementation of its objects in as much as it has acquired the land, converted the land for institutional use for setting up the hospital project, appointed the architect., carried out soil testi .....

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AA. The assessee with the present application has enclosed registration certificate u/s 12AA dated 14.11.2014. Thus when assessee has satisfied all the conditions for grant of approval u/s 80G, the order passed by CIT refusing such approval only on surmises and conjectures sis bad in law. Otherwise, also once assessee has taken the steps for establishment of the hospital and medical college, it cannot be said that assessee has not yet commenced any activity. Further, the genuineness of the objec .....

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by the applicant as per the objects. The Company is doing only capital expenditure like acquisition of land, conversion of land, appointment of architect, soil testing etc. In a period of more than five years the assessee could not carry out any of the activities in accordance with the objects of the company. Seeing the insignificant nature of activity the case does not seems to be fit for granting exemption u/s 80G at this stage. Therefore, its application in form No. 10G seeking exemption u/s .....

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te u/s 12AA not enclosed with the application and hence, it is not eligible for approval u/s 80G(5)(vi). The reasons cited in the impunged order states that seeing the insignificant nature of activity, the case does not seems to be fit for granting exemption u/s 80G at this stage. The question that arises for consideration is whether the reason cited by the ld CIT justifies denial of approval under section 80G(5) of the Act. On perusal of section 80G(5) as well as Rule 11AA, what is required to .....

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e appellant has been duly registered under section 12AA which shows beyond any doubt that ld CIT has already verified the genuineness of the objects and its activities are not doubted by the CIT. Hence, having granted registration u/s 12AA, the first condition regarding establishment of institution for charitable purposes is fulfilled. Regarding satisfaction of additional conditions specified in clause (i) to clause (v) of section 80G(5), there is no dispute as apparent from the order of the ld .....

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pellant towards achievement of its object for establishment of the hospital and medical college, it cannot be said that assessee has not yet commenced any activity. The CIT has accepted that assessee has taken steps for implementation of its objects in as much as it has acquired the land, converted the land for institutional use for setting up the hospital project, appointed the architect., carried out soil testing etc. All these activities are towards the achieving the objects of the trust. The .....

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t has sought the approval under section 80G whereby the donations can be accepted for approved purposes and the project can be expedited. The approval under section 80G will thus aid and provide the necessary support in successful completion of the project. In our view, ld CIT (Exemption) was not correct in denying the approval under section 80G(5) to the appellant. 2.10 Further, we have gone through the decision of decision of Coordinate Bench in case of Pearls Educational Institute (Supra). Th .....

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