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TMI Blog2019 (9) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... t came into existence through trust deed which is reproduced below: "This declaration of Trust is made in the city of Delhi on this 27thday of June 2017 by Ms. Lavanya Anirudh Verma D/O Mr. H. Rajamani R/O F-001 Yamuna Apartments, Alaknanda, New Delhi 110019, hereinafter called the EXECUTANT TRUSTEE/ SETTLOR. The expression of the Executant Trustee/ settlor hereinused unless repugnant to the contest hereof shall mean and include her heirs, successors, legal representative, administrators, nominees and assignees. And WHEREAS the Executant trustee/ settlor is desirous to settle a Trust for Charitable purposes and hereby settle a sum of Rs. 1,100 (Rupees One Thousand One Hundred Only) whollyfor charitable purposes and advancement of objects of general public utility for the exclusive benefit of the public without reference to caste or creed or religion and not involving the carrying on of any activities for profit. It is considered expedient to execute a formal deedof Trust specifying the terms and conditions for such administration and also the powers of the Trustees. NOW THIS DEED THEREFORE WITNESSETH AND IT IS HEREBY DECLARED BY THE EXECUTANT TRUSTEE/ SETTLOR IS AS FOLLOW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducation in Arts, Science, Commerce, Agriculture and allied fields, Literature, Philosophy, Physical Education, training, or in any other subjects of faculty or for furthering thecause of education and furthering the cause of the beneficiaries. h) To give awards, rewards and recognition and other incentives to deserving candidates i) To provide, give help to poor and meritorious students of either sex either by payment of fees or by providing them books or defraying other incidental expenses by suitable means j) To promote physical culture and education and toassist and promote sports and games. k) Tosupport, maintain, manage and/ or grant aid to schools (formal and non-formal including bridge schools, remedial schools and tuition centres), colleges, technical and/ or otherinstitutions, libraries, reading rooms, lecture halls, studygroups, public museums, galleries or paintings, and/ or other works of art or collection of natural history and to grant aid for the promotion of science or literature or fine arts or diffusion of useful knowledge or economic and scientific inventions and designs and to grant aid, support and maintain persons and institutions engaged therein. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly/ severally by the trustees or may be authorized by the trustees. d. To purchase or acquire on lease or in exchange or by way of gift or otherwise any movable or immoveable property and any right or privileges necessary, incidental or convenient for the purposes of the Foundation and to sell, improve, manage, lease, mortgage, rent out or otherwise deal like collaboration with any property of Foundation for furthering the objects of the Foundation and to sign, execute any papers in this connection. e. To borrow, if need be, against the security of theassets or otherwise of the Foundation by way of bank overdraft, loan or otherwise, as may be necessary for the benefit of the Foundation and for more effectively carrying out the objects of the Foundation and to authorize one or more of the Trustees to execute such documents, deed, papers, etc. as may be necessary in connection therewith. f. The trustees shall cause to be maintained true andcorrect account of all assets and liabilities and money received or expenses incurred and get the accounts audited by a Chartered Accountant. The first accounts of the Foundation shall be closed on 31st March 2018 and thereafter annually on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effective and binding as resolution or decision passed at a meeting of the Trustees. 10) On dissolution of the Foundation, its Properties will be transferred to any other public charitable trust having one or more similar objects. IN WITNESS WHEREOF THE EXECUTANT TRUSTEE/ SETTLOR HERETO SETS AND SUBSCRIBES HER HANDS ON THE DAY, MONTH AND YEAR FIRST ABOVE WRITTEN. 3. The applicant filed separate applications in Form Nos. 10A & 10G, each dated 11.10.2017; the former application seeking registration under section 12AA of I.T. Act; and the latter seeking approval under section 80G of the Income Tax Act respectively; in the office of the ld. CIT(Exemption). The applicant also filed copy of financial statement (including receipt and payment account & statement of affairs). Further, the applicant filed copies of banker's cheques amounting to Rs. 3,500/- and Rs. 2,500/- in favour of Shakun Stationary Mart (totalling Rs. 6000/-) as evidences in support of the contention that the applicant was engaged in charitable activities [by way of distribution of stationary for the new terms for orphaned girls in a Child Care institution for girls (NGO), and by way of giving of Bottles and Tiffin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed under the act. v. The trust/institution should quote the PAN in all its communications with the Department. vi. The registration u/s 12AA of the I.T. Act, 1961 does not automatically confer any right on the doners to claim deduction under section 80G. vii. The certificate cannot be used as a basis for claiming non deduction of tax at source in respect of investments etc., relating to the Trust/Institution. viii. All the Public Money so received including for Corpus or any contribution shall be routed through a Bank Account and such Bank Account Number shall be communicated to this office. ix. No change in the terms of Deed of the Trust shall be effected without due procedure of law i.e. by order of the jurisdictional High Court and its intimation shall be given immediately to this office. The registering authority reserves the right to consider whether any such alteration in objects would be consistent with the definition of "charitable purpose" under the Act and in conformity with the requirement of continuity of registration. x. No asset shall transferred without the knowledge of the undersigned to anyone, including to any Trust/Society/Non profit Company etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that the assessee had incurred only Rs. 6,000/- for charitable activities such as distribution of stationary items Bottles and Tiffin boxes for orphan boys. The learned counsel submitted that the applicant had limited financial resources at its disposal because of which it was not possible for the assessee to spend more amount for charitable work. Drawing the attention to the financial statement, the learned counsel submitted that at the relevant time when the ld. CIT(E) rejected the applicant's application for approval under section 80G of the I.T. Act, the total funds available with the applicant (including donations amounting to Rs. 18,000/-) was only Rs. 19,000/- out of which Rs. 6,000/- (excluding bank charges of Rs. 68/-) had already been spent, and that the applicant was left with only Rs. 12,832/-. The learned counsel further submitted that the applicant is facing enormous difficulty in obtaining donations because of denial of approval under section 80G of the Income Tax Act. The ld. Counsel made further reliance on paper book filed in the course of appellate proceedings in ITAT, which contained the following documents: S. No. Particulars 1. Written submissions f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on the above subject. Following further submissions are made: 1. Undertaking from the Founder Trustee with regard to distribution of funds on Dissolution of the Trust; amendment in the Trust Deed and also investment as prescribed in s. 11(5) of the Income Tax Act, 1961 is being filed. 2. The Trust has since opened a Bank account in the State Bank of India, Lotus Tower Friends Colony, Community Centre, New Delhi 110025 branch. The Account number of the Trust is 37642992387. Copy of bank statement is enclosed. 3. Profile of the Trustees of the Trust in the prescribed format is being filed. 4. The Trust has carried on various charitable activities during the month of April to attain its objects. The evidence in support thereof along with photos of the events are enclosed. * Stationary for the new term for orphaned girls in a Child Care Institution for Girls (NGO)-Photograph enclosed * Giving of Bottles and Tiffin Boxes for orphaned boys in a Child Care Institution for Boys (NGO)-photograph enclosed 5. The object of the Trust is to work for the uplift and welfare of underprivileged children, orphans and abandoned children. It is registered to provide relief to the need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one or more of the conditions 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 [end of the month in] which such application was made : Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub-rule (3) shall be excluded.]" (D-1) For further convenience of reference, the provisions of section 80G(5) of I.T. Act are also reproduced 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 fulfills the following conditions, namely :- (i) where the institution or fund derives any income, such in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." (D-2) On perusal of the aforesaid statutory provisions it is found that the grounds on which approval under section 80G of the Income Tax Act can be denied to an applicant are specified in Rule 11AA (5) of I.T. Rules which refers to the conditions laid down in clauses (i) to (v) of sub section 5 of section 80G of I.T. Act. We find that nowhere it is the case of the ld. CIT(E) that any of the conditions laid down in clauses (i) to (v) of section 80G(5) of the I.T. Act are not fulfilled. It is also nowhere the case of the ld. CIT(E) that objects of the applicant trust are not charitable. On perusal of the trust deed, already reproduced in foregoing paragraph (B) of this order, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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