Gurudwara denied tax exemption due to lack of approval under IT Act Section, Tribunal rules

The Tribunal upheld the denial of exemption under section 10(23C)(v) of the I.T. Act for the Assessee, a Gurudwara, as it failed to provide evidence of approval from the Prescribed Authority. The Tribunal emphasized the necessity of approval for claiming exemption and rejected the Assessee's argument that approval was not required for the relevant assessment year. The appeal challenging the denial of exemption was dismissed, affirming that without approval, the Assessee could not claim the exemption. The Tribunal also noted that the additions made by the Assessing Officer were deleted by the Ld. CIT(A), rendering discussion on those additions academic.

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Issues:
Interpretation of provisions of Section 10(23C)(v) of the I.T. Act, 1961 for A.Y. 2011-2012.

Analysis:
The appeal by the Assessee was directed against the Order of the Ld. CIT(A)-40, Delhi, challenging the interpretation of Section 10(23C)(v) of the I.T. Act, 1961. The Assessee, a Gurudwara not registered under sections 11 and 12 of the I.T. Act, was treated as a normal AOP by the A.O. The A.O. initiated re-assessment proceedings under section 147 due to non-filing of income tax return and observed discrepancies in interest and rent received. The Assessee claimed exemption under section 10(23C)(v) as a religious organization but failed to provide evidence of registration or approval from the Prescribed Authority, leading to rejection of the claim.

The A.O. disallowed certain expenses under section 69C and made additions, which were later deleted by the Ld. CIT(A). The Assessee challenged the denial of exemption under section 10(23C)(v) before the Ld. CIT(A), arguing that approval was not required as per Rule 2C of I.T. Rules. However, the Ld. CIT(A) dismissed this ground, emphasizing the necessity of approval under the amended provision.

During the hearing, the Learned Counsel for the Assessee reiterated that approval by the Prescribed Authority was not required for the assessment year under appeal. The contention was based on Section 115BBC(2) regarding anonymous donations. The Ld. D.R. argued that the burden was on the Assessee to prove approval for claiming exemption under section 10(23C)(v).

The Tribunal analyzed the provisions of Section 10(23C)(v) and Rule 2C of I.T. Rules, emphasizing the requirement of approval by the Prescribed Authority for claiming exemption. The Tribunal rejected the Assessee's argument that approval was not needed before 15.11.2014, as the provision was applicable for the assessment year under appeal. The Tribunal also dismissed the Assessee's reliance on Section 115BBC(2) as no anonymous donations were in question. As the Assessee failed to provide evidence of approval, the denial of exemption under section 10(23C)(v) was upheld.

In conclusion, the Tribunal dismissed the Assessee's appeal, noting that without approval under section 10(23C)(v), the Assessee could not claim exemption. The discussion on the addition made by the A.O. was deemed academic as those additions were deleted by the Ld. CIT(A). Thus, the denial of exemption was justified, and the appeal was dismissed.

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