2012 (4) TMI 795

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.... application for renewal of exemption u/s 80G(5) of the Act. On perusal of the accounts, it was noticed by the Director of Income Tax (Exemption), Ahmedabad that as on 31-03-2008 a sum of Rs. 51.59 lacs was advanced to 3 (three) trusts in respect of which the audit report of the Chartered Accountant remarked as under:- REMARKS The trust has given advances to following trusts and at the end of the year following amount is outstanding for which permission of Charity Commissioner is not obtained. Name of the Trust Balance outstanding as on 31-03-2008 1. K M Hospital Trust 4534865.00 2. Pathik Foundation 45000.00 3. P K Charitable Trust 580000.00   5159865.00 The assessee-trust was asked to expl....

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....00/- on 7-4- 2007, Rs. 10,000 on 7-7-2007 and Rs. 45,000/- on 30-10-2007. There were two recoveries of Rs. 25,000 and Rs. 20,000/- in October, 2007. Thus, advances made had no bearing to 15% income of earlier years. In fact, the income for year ended 31-3-2008 was only about Rs. 6300/-. The trust is not in existence for the purpose of advancing money to other charitable trust but to carry out its own objects of charity. In short, there are violations/deficiencies which are being perpetuated without any corrective action even after Auditor's remarks. Mere statement that they would retrieve the advance in due course of time cannot justify the action of the trust so far. As such, the reply of the assessee is not persuasive to prove that th....