TaxTMI 
TaxTMI 
2020 (9) TMI 960
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....the provisions of the Act. 2.2. The Appellant is registered under section 12AA of the Act and fulfils all the conditions as mentioned under clause (i) to clause (v) of sub-section (5) of section 80G, a fact which has not been challenged by the Hon'ble CIT(Exemption). 2.3. As held by various judicial forums, there was no justifiable cause for the Hon'ble CIT(Exemption) to look into the objects or activities carried out by the Appellant. 3. That on the facts and circumstances of the case and in law, the Hon'ble CIT(Exemption) has erred in holding that the activities of the Appellant do not fall within the ambit of charitable activities, inter alia because- 3.l. The objects of the Appellant had already been examined and held to be charitable in nature at the time of its registration under section 12AA of the Act. 4. That on the facts and circumstances of the case and in law, the Hon'ble CIT(Exemption) has erred in holding that the Appellant is not involved in the charitable activities and has not been able to prove their genuineness, inter alia because: 4.1. Activity of donating receipts to institutions which carry ....
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....ng the genuineness of the activities of the applicant which is mandated by law. In absence of such satisfaction, the applicant loses its eligibility for consideration for according the said approval. 6. In view of the above discussion, it is clear that the applicant society is not entitled for approval u/s 80G of the IT Act 1961. Accordingly the application in form no, 10G seeking approval u/s 80G is hereby rejected. The crux of the CIT(E)'s finding was that the Appellant has made donations to other trusts/societies, namely Warne Baby Fold, Salaam Balaak Trust and Jeevan Dhara Trust and has not done any charitable activities itself. The CIT(E) has either ignored or not appreciated the entire gamut of activities undertaken by the Appellant since its inception. That the activities of the Trust since inception as were explained to the Hon'ble CIT(E) since inception are placed at pg.61/PB. 3. That the Appellant enjoys exemption u/s 12AA of the Act vide registration no. CIT(E) Lucknow/12AA/2018-19/A/1181-A dated 23.7.2018, The order of registration u/s 12AA of the Act is placed at pg 151-152/ PB. The Appellant places reliance on the d....
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....(E) has not alleged that the Appellant has violated any specified rules nor has he alleged that the funds of the Trust were utilised for private purposes. 7. The Appellant also places reliance on the judgment of the Hon'bte jurisdictional Allahabad High Court in Hardiyal Charitable & Educational Trust v. Commissioner of Income Tax-11, Agra reported in 355 ITR 534 which was rendered in the context of registration u/s 12AA. -It is humbly submitted that the conditions for grant of registration u/s 12AA and approval u/s 80G of the Act are pari materia the same and therefore the ratio of the above judgment applies to the present case with equal force. The Hon'ble Court held that: "The preponderance of the judicial opinion of all the High Court including this court is that at the time of registration under Section 12AA of the Income-tax Act, which is necessary for claiming exemption under Sections 11 & 12 of the Act, the Commissioner of Income Tax is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust set up to achieve its objects of establishing educational institution, is in the proces....
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....mann.com 143 (SC) wherein it has been held that: "Section 80G, read with section 12AA, of the Income-tax Act, 1961 - Deductions - Donations to certain funds, charitable institutions (Subsection (5)) - Assessment year 2016-17 ~ Assessee-trust was granted registration under section 12AA - For relevant year, assessee filed application for grant of approval under section 80G(5)(vi) ~ Commissioner (Exemptions) declined approval under section 80G(5)(vi) on ground that activities of assessee-trust were not for charitable purposes and 50 per cent of donations was from trustees themselves - Tribunal noted that no action under sub-section (3) of section 12AA had been initiated for cancellation of registration of assessee-society - Tribunal further opined that Commissioner (Exemptions) before denying approval under section 8QG(5)(vi) was required to record a definite finding of fact that funds were utilised for private purposes and not for charitable purposes - On account of failure of revenue authorities to bring any such evidence on record, Tribunal concluded that order passed by Commissioner (Exemptions) was not sustainable- Accordingly, Tribunal granted approval to assessee- trus....
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....he Act We do not find any reason to differ with the view taken by the Tribunal. Needless to say, in case, in subsequent years, the revenue is satisfied that the activities of the respondent-assessee are not qualified for charitable purposes, it shad be open for the department to initiate action for cancellation of registration under Section 12AA of the Act and also for passing appropriate orders regarding approval granted under Section 80G(5)(vi) of the Act in accordance with law." In light of the aforesaid, it is humbly pleaded that the decision of the CIT(E) declining approval under section 80G(5) of the Act is unreasonable and legally not sustainable and deserves to be reversed. The Appellant prays that it may be granted registration u/s 80G(5) of the Act. 5. On the other hand, the ld. DR has submitted that the notes of the activities submitted by the assessee, the above said fact was not cleared rather it would shows assessee was merely a facilitator between the donor and actual charitable trust. As such case may be the above said aspect has not been examined and the finding of the ld. CIT(E) was based on the premises that the assessee was not involved any charitabl....
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.... there is no evidence to prove genuineness of the activities undertaken by these organizations. A perusal of the documents filed in support of the claim of charitable activities creates a serious doubt about the nature and purpose of such expenses. A few observations in this regard are as under:- As per page 65 of the paper-book certain amount has been paid for college fees and mess fees of two girls through M/s Warne Baby Fold. However it has not been clarified how these two beneficiaries were selected and whether they have some relationship with the trustees or M/s Varuna Integrated Logistics Private Limited. Though in the written submission the assessee has claimed that its objects empowered it to give donations to other charitable organizations, it must be noted that as per the objects, such donations could be utilized only for the public at large and not for specific beneficiaries. It has also not been clarified as to how these beneficiaries were selected and which economic/social parameters were considered for this purpose. On page 65(B) there is a payment voucher on the stationery issued by M/s Varuna Integrated Logistics Private Limited which show....
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....enuine furtherance of its stated objects. In view of the above, the denial of approval by the CIT(Exemption) is fair and reasonable. The assessee trust has become merely a tool for the purpose of diverting the mandatory CSR contribution of M/s Varuna Integrated Logistics Private Limited." 7. We have heard the respective arguments of both side and have also gone through the record. the commission exemption, has rejected the application of the assessee, for various reasons including the reason that, that the assessee has not carried out any charitable activities. The assessee has drawn our attention to the various activities (three) which were carried out by the assessee for charitable purposes. The above said aspect has not been denied by the ld CIT DR, however he had raised some objection to that activities and sought to justify the act of the CIT exemption. In our view the order impugned before us is conspicuous silent on the carrying out of the activities by the assessee rather the order has not dealt with any of the activities carried out by the assessee. In our considered opinion, the interest of justice requires that the ld. CIT(E) should examine the documents (alr....