9911796707
TMI Blog2024 (6) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal filed by the assessee is barred by limitation and is delayed by 3 days. Ld AR of the assessee explaining the reasons for delay has submitted that on receipt of the order immediately the relevant papers were send to the tax consultant for further action. The appeal was to be filed by another outstation counsel, meanwhile the papers were also reportedly misplaced in the office of tax consultant. Thus, a delay of 3 days has been caused which is requested to be condoned. After deliberations, we find the delay caused was unintentional and beyond the control of the assessee, therefor the same has been condoned. 4. Now, we shall be proceeding with to deliberate upon the sole controversy raised by the assessee trust in the present appeal. 5. Ld AR of the assessee has submitted a written submission stating the facts of the case, including contentions of the assessee, supporting case laws and rebuttal to the case laws relied upon by the Ld CIT(E) while rejecting the application of the assessee u/s 80G(5B). For completeness of the facts the same is extracted as under: - a) The appellant is a society registered u/s 12A of the Income-tax Act, 1961. It is engaged in charitable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 taxmann.com 203(SC) [P-4] iv) CIT(E) vs. O.P. Munjal Foundations [2020-115 taxmann.com 191 (P&H) [Head Notes] v) DIT(E) vs. International Society for Krishna Consciousness- 2011(1) TMI-1394 (Karnataka HC) vi) CIT vs. Rajkot Jilla Gayatri Parivar Trust - 2019- (8) TMI- 466- Gujarat vii) Santshreshtha Gajanan Maharaj Sevabhavi Sanstha Borisavargao Kasij vs. CIT 2022 (12) TMI 338 - ITAT Pune. h) The Id. CIT(E) did not advert upon case laws cited by appellant. The case laws relied upon by Id. CIT(E) are distinguishable on facts: i) In the case of Upper Ganges Sugar Mills Ltd it was held that even if one purpose or object of the trust is religious or substantially religious, the trust will not be eligible for benefit of Section 80G - assessee was not eligible for benefit u/s.80G as it supported prayer halls and places of worships, which is religious purpose. The present assessee itself is accepting that it is a charitable cum religious institution- Provisions of sub-sec. (5B) to sec. 80 were not inserted at that point of time when Upper Ganges Sugar Mills Ltd. case was decided. ii) Shiv Ratan Rathi Foundation vs. CIT - The Trust has spent about 78% of its total re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be examined. ii. CIT(E) vs. Seth Vinod Kumar Somani Charitable Trust -[2020] 269 Taxman 59 (SC) [para-8] The facts have been discussed in extenso by CIT(E) in his order and are being taken therefrom. The assessee society was granted registration under Section 12AA of the Act by the CIT(E) on 30.11.2015, meaning thereby, the CIT(E) was satisfied that the aims and objects of the assessee were for charitable purposes. No action under Sub section (3) of Section 12AA of the Act had been initiated by the same Officer for cancellation of registration of the assesse-society. Further, the assessee-society in the year of its constitution had received 50% of the donations from the trustees themselves and had utilized the corpus donation for land and building. Ordinarily when an assessee-society is established in the initial years it may be required to set up its place of office from where it would operate and also require building to carry on charitable activities therein. Purchase of land and building by itself would not be sufficient to conclude that the assessee is involved in non6 charitable activities. CIT(E) before denying approval under Section 80G(5)(vi) of the Act was required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied, further action could only be taken at end of financial year to determine whether any donation etc. or other conditions of section 80G had or had not been fulfilled - Held, yes - Whether assessee was to be allowed deductions under section 80G - Held, yes [Para 51[In favor of assessee] v) DIT(E) vs. International Society for Krishna Consciousness- 2011(1) TMI-1394 (Karnataka HC) From the material on record, it is clear that the assessee is a society registered under the Societies Registration Act. From the objects of the said society, it is clear that they are carrying on religious and charitable activities. They have been granted registration under s. 12AA and consequently under s. 80G of the Act being satisfied that they are entitled to such exemption. It is only for the first time for the year 2009 the CIT for the first time called upon them to show cause why the registration should not be renewed (sic'refused) as it is a society which is only carrying on religious activities. A detailed reply setting out their stand is filed, and it is on record. In para 2 of the said statement of objections, the assessee has categorically stated that the expenditure incurred for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the year 1993 to the year 31st March 2006 on the same kind of activities. It is also an undisputed fact that there was no change in the objects and the activities of the trust. Therefore, we are of the opinion that the assessee deserves the registration under section 80G(5) of the Act as per the rule of consistency in view of the judgment of Hon'ble Supreme Court in the case of Radhasoami Satsang reported in 193 ITR 321 wherein it was held as under: "13. We are aware of the fact that strictly speaking res judicata does not apply to income tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. 14. On these reasonings in the absence of any material change justifying the revenue to take a different view of the matter- and if there was no change it was in support of the assessee - we do not think the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h evidences that the assessee-trust has violated the stipulations contained in sec. 80G(5B) of the Act. In fact, the revenue authorities have not demonstrated anything showing substantial expenditures of the fund received in donation by the assessee for religious purposes and whether it is exceeding the permissible limit of 5%. It has also been mentioned by the Id. CIT (Exemption) that the assessee has not provided head- wise details of various expenditure as per para 4.3 of his order but all these details have been submitted before him and as annexed before us in the paper book. The Id. D.R did not refute these facts. In this scenario it will be also worth mentioning that while exercising the power to reject or accord approval u/s 80G(5) the Commissioner acts as a quasi-judicial authority. Therefore, the conclusion arrived at by him is expected to be supported by valid and cogent reasons. It is also expected that he should apply his mind to the facts of each case and give reasons either to grant or refuse recognition/approval. This requirement is very much imperative on the part of the Commissioner particularly having regard to the statutory provision under which he functions. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Ld. CIT(E). 8. Ld. AR further dew our attention to the income and expenditure account of the assessee society, wherein for the year ended on 31.03.2020, total expenditure incurred were Rs.1,65,529/- as against total income of Rs.3,94,756/-. It is further submitted by the Ld. AR that the expenditure has been incurred under the head Bank Charges & Miscellaneous expenses, Copy Purchase, Printing and Stationery, Salary Expenses, Swadharmi Sahayata Expenses (paid to students as scholarships for educational purposes), interest on TDS etc., and none of these head of expenditure indicates or can be construed under any stretch of imagination as attributable towards any religious activity. Similarly, for the year ended 31.03.2021, total expenditure incurred were Rs.1,37,061/- as against total income of Rs.3,72,641/-. Copies of income and expenditure account were placed before us in the assessee's PB. Ld. AR of the assessee further submitted before us under rule 29 of the ITAT rules 1963, copies of audited income and expenditure account of the assessee society for the year ended on 31.03.2014, 2015, 2016, 2017, 2018 & 2019, having similar facts showing income and expenditure under the iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution 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)............ (ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii).......... (iv)......... (v).......... (vi)......... (vii)......... (viii)...... (ix)......... Section 80G(5B)- Notwithstanding anything contained in clause (ii) of subsection (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply. Explanation 3- In this section, "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
