2024 (2) TMI 43 - AT - Income Tax

Trust Denied 80G Registration for Lack of Clarity on Donations and Public Benefit; Accumulation of Surpluses Cited.

Shri Krishna Pranami Jan Kalyan Trust, C/o M/s RRA TaxIndia Versus CIT (E), Chandigarh

Shri Krishna Pranami Jan Kalyan Trust, C/o M/s RRA TaxIndia Versus CIT (E), Chandigarh - TMI Issues involved: Denial of registration u/s 80G(5)(vi) of the Act by Ld.CIT (Exemption), Chandigarh.Summary:Issue 1: Denial of registration u/s 80G(5)(vi) of the ActThe appellant, an Assessee, filed an appeal against the order of the Ld.CIT (Exemption), Chandigarh, denying registration u/s 80G(5)(vi) of the Act. Despite notice, the appellant did not appear, leading to the disposal of the appeal based on the hearing of the Ld. DR. The Ld. CIT(E) denied approval u/s 80G due to the appellant accumulating large surpluses through fees and charges, maintaining significant FDRs and bank balances. The denial was based on the lack of clarity regarding the target group for donations, expansion plans in education, and public benefit. The Ld. CIT(E) highlighted the need for entities to operate on a no-profit-no-loss basis, citing legal precedents. The appellant's claim of requiring donations for non-recurring expenses was deemed unsubstantiated, as no evidence was provided for construction projects or charitable activities. The order to deny approval u/s 80G was upheld by the ITAT Delhi as the appellant failed to refute the findings and lacked a compelling rationale for approval.Decision:The ITAT Delhi sustained the Ld.CIT(E)'s order denying approval u/s 80G of the Act to the appellant trust, ultimately dismissing the appeal.*Order pronounced in the open court on 30/01/2024*