TaxTMI 
TaxTMI 
2022 (9) TMI 1568
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....led for approval u/s.80G, 2. Facts in brief are that the assessee applied for exemption u/s.80G of the Act in form No.10G, which has been rejected by the CIT(E) observing that the activities of the assessee company are commercial in nature and the company has also not specified or explained for requirement of 80G approval for the company. It was also observed by the CIT(E) that the assessee has not provided any justification for its approval u/s.80G of the Act. 3. Against the rejection of application of the assessee filed u/s.80G of the Act, the assessee is in appeal before the Tribunal. 4. Ld. AR before us submitted that the assessee is involved in charitable activities and no part of the income or property of the trust was ever used o....
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....lso referred where in it is held that merely because there are some surplus with the respondent, this should not be a ground to deny the registration under section 80G(5)(vi) of the Act. It is prayed that rejection of application of the assessee for grant of approval u/s 80G under such circumstances holding the assessee is not entitle for the same was not justified and uncalled for, thus needs to be set aside. 5. The ld. Sr. DR relied on the order of CIT(E), wherein the application of the assessee company for grant of registration u/s 80G was rejected, with the observations that (a) The Activities of the assessee company are commercial in nature (b) Company has not specified or explained for requirement of 80G (c) Company is charging fee f....
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....f ITAT Mumbai in the case of Green Education Trust Vs. DCIT reported in (2016) 159 ITD 0671 (Mumbai), wherein it is held that: 3.10. Whether charging of fee and retaining surplus amounts to commercial activity, disentitling an assessee from the benefit of exemption u/s 11 and 12: It has been mentioned by the Ld. DIT that since the school is charging fee for issue of prospectus school uniforms, kits and admission fees etc., and thus, the pre-school is being run like a commercial activity and therefore, the assessee should be refused the benefit of registration. We find that here also, Ld. DIT has gone wrong on law as well as on facts. It has not been stipulated under the statute that for the purpose of getting the benefit of exemption u....
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....ing steps for its‟ withdrawal, if not actually withdrawing it, it yet considers it as not a fit case for grant approval under section 80G, is on the revenue. [Para 3.1] The competent authority, while considering an application for approval under section 80G(5)(vi), is to examine it from the standpoint of rule 11AA read with section 80G(5) in-as-much as only a positive satisfaction of the conditions stipulated therein would qualify for the said approval. [Para 3.2] The only basis cited is the absence of any demonstrated need for donations, which the assessee-society shall have a better access to in view of a tax advantage for the donors on being granted approval under section 80G(5)(vi), and the concomitant possibility of its 'mi....
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....o, or any 'value' parted with in exchange, while what the competent authority apprehends is not 'donation' per se, but payments in the guise of donations, being consideration for grant of admission to various professional courses being provided by the schools/colleges being run and managed by the assessee-society. Two, the enquiry has its limitations. What, if the stated donations do not follow? What, if the stated project, i.e., where so, does not materialize? In either situation, the section 80G approval cannot be withdrawn. Again, it is not impermissible for the competent authority to place the assessee's activities in the field of higher education in the socio-economic context in which it operates, and factor in the same in his findings....
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....purpose', while granting approval under section 80-G(5)(vi) by the competent authority, is therefore to be weighed against, and ought not to denigrate to ousting applications on a mere possibility of misuse. That is, while the revenue is empowered to, nay, duty bound to, ascertain the 'real purpose', as opposed to an 'ostensible purpose', a mere possibility of misuse (of donations) cannot have the sanction of law. Stated differently, the said possibility, for the same to result in a valid denial of approval in law, must be something more than, what has been referred to as a 'distinct possibility'. The same would be a finding of fact, open to challenge, and where found as based not on a surmise, but the surrounding facts and circumstances, o....