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Income Tax Appellate Tribunal, DELHI
Before: SH. G.S.PANNU, HON’BLE & SH. ANUBHAV SHARMA
The appeal has been filed by the Assessee against order dated 29.06.2019 in case no.CIT(E)/ 80G/2019-10/11860 for assessment year 2019-20 passed by Commissioner of Income Tax (Exemption)- New Delhi rejecting the application U/s. 80G(5) (vi) of the Income Tax Act, 1961 r.w.s. 11AA of the Income Tax Act, 1962 ( hereinafter referred as ‘the Act’) .
Heard and perused the record.
Facts in brief are that the appellant is a charitable trust. The appellant claims that the objects of the trust are wholly charitable. The copy of the Trust Deed is placed at Pages 11 to 25 of the Paper Book. The trust applied to grant of approval U/s 80G (5) (VI) vide Form 10G on 07/12/2018. The trust also applied for registration of charitable trust U/s 12(A) (1) of Income Tax Act 1961 in form 10A. The registration U/s 12AA has been granted vide orders dated 29/06/2019 CIT (Exception).
3.1 Ld. Counsel of Appellant assessee submitted but the same CIT (Exemption) has rejected the grant of approval for exemption on U/s 80G of IT Act vide Impugned orders dt 28th June, 2019. It is submitted that C.I.T. (E) has erred in facts and law in rejecting the application for grant of Approval U/s 80G. Ld. Counsel submitted that the assessee had been granted Registration U/s 12AA of the Act by the C.I.T.(E), the same is still continuing so that shows that the activities being carried out by the assessee society is in accordance with registration U/s 12AA of the Act, so granting of approval U/s 80G (5) of the Act is consequential. Further the Ld Counsel submitted that the appellant again applied for grant of Approval U/s 80G (5) and the approval has been granted vide order dt 09-07-2021 from Asst Year 2021-22 to 2023-24, the copy of the orders is placed at page 26 of the Paper Book.
3.2 On other hand Ld. DR submitted that the orders of Ld Tax Authorities below are according to law.
Giving thoughtful consideration to the submissions and matter it appears that the impugned order of Ld CIT(E) is on a foundation that genuineness of charitable activity could not be established for the reason that appellant was charging fee from the participants and most of the expenses are by way of cash. However, on page no 8-10 of PB is the order dated 29/6/19, of same CIT(E) where the appellant is issued registration u/s12AA of the Act. The condition no 13 in this sanction provided that the registration so granted is liable to be cancelled at any point of time if registering authority is satisfied that activities of the Trust/Institution are not genuine. However, on same date 29/6/19 the impugned order was passed holding that the genuineness of charitable activity could not be established. As a matter of fact for subsequent years the permission was granted showing that the genuineness of charitable activity was considered established for following years also. This all shows arbitrary exercise of the statutory power vested under the Act for passing the impugned order.
On the contrary, the ld CIT(E) failed to follow or distinguish, the settled position of law that if registration was issued u/s 12AA of the Act then the natural consequence should have been to grant permission under Section 80G of the Act. Reliance in this regard can be placed on the order dated 6 February, 2019 of Delhi Bench in Bharat Vikas Parishad Maharana vs Cit (Exemption) Hqtr. Vide, ITA.No.6487/Del./2018 where in after taking into consideration Hon'ble Punjab and Haryana High Court Judgement of in the case of Sonepat Hindu Educational and Charitable Society vs. CIT (2005) 278 ITR 262 (P & H), Hon'ble Delhi High Court judgement in the case of DIT vs. Foundation of Ophthalmic & Optometry Research Education Centre 2012 (8) TMI 77 (Del.), the Delhi Bench held;
“5. After considering the rival submissions, we are of the view that Order under section 80G(5) denying approval to the assessee cannot be sustained in Law. It is not in dispute that assessee has been granted registration under section 12AA of the I.T. Act, 1961, by DIT (E) vide Order Dated 29.09.2018. The Ld. CIT(E) was satisfied with the objects and activities of the assessee that it is meant for charitable purposes, therefore, different view cannot be taken while refusing the grant of approval under section 80G(5) of the I.T. Act. The Ld. CIT(E) did not doubt the objects of the assessee and did not mention anything if assessee has violated any of the conditions of Section 80G(5) of the I.T. Act. Considering the totality of the facts and circumstances of the case in the light of above decisions relied upon by the Learned Counsel for the Assessee, we are of the view that assessee is entitled for approval under section 80G(5) of the I.T. Act, 1961, from the date of application. We, accordingly, set aside the impugned Order and direct the Ld. CIT(E), Chandigarh, to grant approval to the assessee under section 80G(5)(vi) of the Income Tax Act, 1961, from the date of application.”
In the light of aforesaid discussion the appeal is allowed and the impugned order of Ld. CIT(I) New Delhi is set aside and the Ld. CIT(E), New Delhi is directed to grant approval to the assessee under section 80G(5)(vi) of the Income Tax Act, 1961, for the relevant year, from the date of application.
Order pronounced in the open court on 20th January, 2023.