Section 80G approval cancellation set aside after proof of charitable fund utilisation and trust objects deployment.

Cancellation of approval under Section 80G was found unjustified where the assessee produced valid Section 12AB registration, audited financial statements, receipts and payments statements, FCRA fund-utilisation details, and other supporting records showing that funds were deployed for the trust's objects. The Tribunal accepted that, on this material, the finding that the funds remained idle in bank FDRs and were not used for charitable purposes was not sustainable, and the cancellation was set aside in favour of the assessee.

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Issues: Whether the cancellation of approval under Section 80G of the Income-tax Act, 1961 was justified in view of the material placed by the assessee regarding its charitable activities and utilisation of funds.

Analysis: The assessee had valid registration under Section 12AB and the record included receipts and payments statements, audited financial statements, details of FCRA fund utilisation, and other supporting documents showing deployment of funds towards the objects of the trust. On the material placed before it, the Tribunal found that the conclusion that funds were lying idle in bank FDRs and were not being utilised for the objects of the trust was not sustainable.

Conclusion: The cancellation of approval under Section 80G was held to be unjustified and was set aside in favour of the assessee.

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