2020 (2) TMI 578

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....ioner of Income Tax (Exemptions) (for short, 'the CIT') was directed to grant approval to the respondent-society under Section 80G of the Income Tax Act, 1961 (for short, 'the Act'). Following substantial questions of law have been claimed: "(i) Whether on the facts and circumstances of the case, the Hon'ble ITAT was correct in disregarding the fact that the main emphasis of the applicant society was generating the income and accumulating surpluses in shape of FDRs? (ii) Whether on the facts and circumstances of the case, the Hon'ble ITAT was correct in disregarding the fact that the major emphasis of the society appeared to be accumulation of asset in the form of FDRs and earning interest on the sa....

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.... for fodder and shelters for keeping the cattle and accordingly make arrangements for purchase; to make arrangements for cultivation for agricultural lands available with Gaushala to collect funds for the above objects, and to control/supervise investment and expenditure." The society is duly registered under Section 12AA of the Act. An application was made on 16.12.2016 for approval under Section 80G of the Act. The CIT rejected the same vide order dated 29.6.2017 mainly on the ground that the society was generating certain income and as a result, the amount of FDRs was being enhanced over the year. The conclusion was that the society had diverted from the object of serving old, ill and lame cows and got involved in commercial activitie....

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....ssary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he;-- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant: Section 80G(5)(vi) : Deduction in respect of donations to certain funds, charitable institutions, etc. In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this Section:- XX XX XX (5) This Section applies to donations to any institution or....

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....e averment of the society before the CIT, it was evident that out of total 350 cows, only 20-30 cows were milking. The doubt raised by the CIT was as to how 20-30 cows could produce milk worth Rs. 16,54,634/-. The said doubt was baseless as the CIT was swayed by the figure. If the figure is roughly worked out to the daily amount and if an average price per litre milk is taken as Rs. 40/-, the production would come to 114 litres of milk a day. The objection that the amount in FDRs had enhanced will not enhance the case of the revenue. There is not even an iota of evidence to establish that the amount was not being utilised for the aims and objects of the society but for some other purpose. The amount only gives a protection to the society....