TaxTMI 
TaxTMI 
2020 (6) TMI 265
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....e Tax Act, 1961 (hereinafter called 'the Act'), 2.0 The brief facts of the case are that the assessee society is running a school and a B.Ed. college at Village Deshalpur, PO Nuna Majra, Bahadurgarh, Haryana. The school is affiliated to Central Board of Secondary Education and the B.Ed. college is affiliated to National Council for Teacher Education and MD University at Rohtak, 2.1 The assessee's society was given approval u/s 12AA of the Act vide order dated 29.7.2016. Immediately after the grant of registration u/s 12AA of the Act, the assessee society made an application before the Ld. CIT (E) for grant of approval u/s 80G (5) of the Act. The stated aims and objectives of the society are to open and operate Engineering Colleges, te....
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....pagation of its objects and also for financing future expansion. It was also stated by the Ld, CIT (E) that the assessee society has failed to elaborate on the target group of persons from whom the donation was to be sought and that there was no list of people who have shown the inclination to donate to the society. The Ld. CIT (E) also observed that since there were investible surpluses available with the assessee society, there was no rationale for seeking donations, With these observations, the Ld. CIT (E) rejected the assessee's application for approval u/s 80G of the Act, 2.1 Aggrieved with this order, the assessee is now before the ITAT and has challenged the rejection of the assessee's application. The following grounds have been ....
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....Ld. CIT (E) has passed the order in haste and is against the facts, law and provisions of the Income Tax Act, 1961 and rules made there under, 3.0 Ld. AR submitted that the Ld. CIT (E) has made irrelevant observations and has given an entirely wrong reasoning for the rejection of assesee's application. It was submitted that while giving approval u/s 80G of the Act, there is no requirement for elaborating the target group for raising the donations and that the history of donations received also irrelevant. It was further submitted that the observation of the Ld. CIT (E) that the assessee had huge amount of FDRs was incorrect as much as the assessee had to keep the FDRs mandatorily for the purpose of affiliation by the National Council of ....
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.... and submitted that out of the 33 objects mentioned in the objects clause, only 13 objects related to furtherance of education and that the rest of the objects were of general public utility and therefore the Ld. CIT (E) was right in doubting the genuineness of the activities. It was also submitted that while considering the assesee's application for grant of approval u/s 80G of the Act, the Ld. CIT (E) has the power to call for any document or clarification and, therefore, he cannot be faulted for requiring the assessee to submit a list of the proposed donors as well as the past history of donations receipts. The Ld, CIT (DR) also submitted that the assessee had himself stated on a query from Ld. CIT (E) regarding the target group for rece....
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.... of the activities cannot be doubted within a short span of six months. The Ld. CIT (E) has himself stated that the assessee society has been running educational institutions and, thus, it is an accepted fact by the department that the society is carrying on educational activities. Further, the Ld. CIT (E) has drawn adverse inference from the fact of the assesee earning interest from FDRs and from the fact of maintaining FDRs. It is an accepted practice and a well known fact that educational institutions are directed to maintain some sort of reserve funds in the form of FDRs by the bodies granting affiliation and, therefore, the assessee cannot be put to a disadvantage for following the mandatory requirement by the affiliation bodies and bo....
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....at what is required to be found is the real purpose of establishment of the trust. The Hon'ble High Court went on to observe that what is required to be found is the real purpose of the establishment of the trust and while there can be no quarrel with the proposition of the CIT that he is fully competent to find out the real purpose, as distinguished from the ostensible purpose of the same, the approval should not be denied on mere technicalities. The Hon'ble High Court also observed that as a matter of fact that the power to grant or negative the claim for approval is coupled with a duty, 6.2 The Hon'ble Punjab & Haryana High Court in another case of CIT vs. Rajmala Educational Society reported in (2012) 65 DTR 0307 held that merely bec....