TaxTMI 
TaxTMI 
2013 (5) TMI 151
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....stered as a charitable trust u/s. 12AA of the Act by the then Commissioner of Income-tax, Kerala vide his order dated 1st February, 1974. The assessee-Trust was also enjoying recognition u/s. 80G of the Income Tax Act up to the assessment year 2008-09. On expiry of the earlier approval, the assessee filed an application dated 17-03-2009 before Ld CIT seeking renewal of approval granted to it u/s. 80G of the Act. However, the said application was rejected by the Ld. CIT, Kottayam, vide his order dated 25-09-2009. The assessee preferred appeal before the Tribunal challenging the above said order passed by the Ld. CIT and the same was numbered as ITA 557/Coch/09. While the appeal is pending before the Tribunal, the assessee moved another appli....
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....bmitted that the entrance fee collected by the assessee does not amount to carrying on any business activity as observed by the Ld. CIT in his order dated 25-09-2009. The Ld. AR further submitted that the Ld. CIT in her order dated 19-05-2011 has failed to appreciate that the assessee-Trust had amended its Trust Deed by removing the clauses relating to carrying on any business activity. The Ld. AR further submitted that the assessee has satisfied all the conditions specified u/s. 80G(5)(vi) of the Act and hence, the Ld. CIT was not right in law in refusing to grant approval u/s. 80G of the Act. The Ld. Counsel for the assessee further relied on the following case law in support of her submissions: a) N.N. Desai Charitable Trust vs. CIT (....
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....he approval u/s 80G of the Act for the following reasons:- "As a result of the rectification to the Trust Deed, the Trust is not authorised to carry on any business or to invest in any business undertaking of whatever nature, and Trust properties are not stated to include any business undertaking. However, it has been noticed from the accounts filed, the applicant is running a private Museum as evidenced by the Museum collection receipts of Rs. 64,850/-, Rs. 1,86,350/- and Rs. 2,48,600/- credited in the Income and Expenditure Accounts for the years ended 31-03-2007, 31-03-2008 and 31-03-2009 respectively. It has also been noticed that an amount of Rs. 39,500/- debited in the Income & Expenditure Account for the year ended 31-03-2008. Thu....
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....80G till such activities are returned. 5. In view of the above, I am not satisfied that the Trust fulfils all the conditions laid down in section 80G(5)(vi) of the Income Tax Act to renew the approval granted up to 31-03-2008. As there is no charitable activity carried out by the applicant, the application for renewal of approval u/s. 80G(5)(vi) of the Income Tax Act is rejected". 8. Thus, it is seen that the Ld CIT has mainly rejected the application of the assessee on the reasoning that the activity of running a museum amounts to running of a business activity, which according to Ld CIT was not permitted by the Trust deed of the assessee. On the other hand, the case of the assessee is that it is collecting only entrance fee from the....
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....nstitution or fund derives any income, being profits and gains of business, the condition that such income of section 11 shall not apply in relation to such income, if - (a) the institution or fund maintains separate books of account in respect of such business. (b) the donations made to the institution or fund are not used by it directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly for the purposes of such business. (ii) the instrument under which the institution or fund is con....