Appeal allowed for trust under section 80G(5) - object considered for approval, expenditure later.

The Tribunal allowed the appeal of the assessee-trust, setting aside the Commissioner's rejection of their application for approval under section 80G(5) of the Income-tax Act. Relying on a judgment of the Punjab & Haryana High Court, the Tribunal held that the trust's object should be considered during approval, and expenditure assessment could be done later. As the Commissioner's sole reason for rejection was the trust's failure to meet expenditure requirements, the Tribunal directed the grant of recognition under section 80G(5) to the assessee-trust.

---

---

Issues involved: Appeal against rejection of application for approval u/s 80G(5) of the Income-tax Act, 1961.

Summary:
The appeal was filed by the assessee-trust against the order of the Commissioner of Income-tax, Rajkot rejecting their application for approval u/s 80G(5) of the Income-tax Act. The Commissioner rejected the application citing the trust's failure to meet the expenditure requirement as per sec 80G(5) of the Act. The assessee contended that the trust deserved recognition u/s 80G(5) and challenged the Commissioner's decision on various grounds. During the hearing, the Authorized Representative for the assessee-trust argued that the trust had met the expenditure criteria in the subsequent year, citing relevant case laws to support their claim.

The Tribunal considered the arguments and referred to a judgment of the Punjab & Haryana High Court, which stated that the object of the trust should be examined at the time of granting approval for exemption u/s 80G, and the application of funds could be assessed during the framing of the assessment. The Tribunal found that the only reason for rejection given by the Commissioner was the trust's failure to meet the expenditure requirement. Following the High Court's judgment, the Tribunal set aside the Commissioner's order and directed the grant of recognition u/s 80G(5) to the assessee-trust.

In conclusion, the appeal of the assessee was allowed, and the Tribunal ordered the grant of recognition u/s 80G(5) to the trust as applied for.

---