THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH vs. M/S SANT GIRDHAR ANAND PARMHANS SANT ASHRAM, SAMBA, JAMMU & KASHMIR (PAN: AAMTS0194B)

The appellant-revenue has filed the instant appeal under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 11.08.2017, Annexure A.2, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, “the Tribunal”) in I.T.A. No.653(Asr)/2015, claiming following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is right in directing the approval to be accorded instead of reverting it back for re-examination in the light of its findings? (ii) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is right in granting approval u/s 80G of the Act to the assessee, ignoring the fact that the pooja Gurbax Singh 2018.06.01 16:44

A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. An application was received for grant of approval under Section 80G(5)(vi) of the Act on 11.05.2015 in the office of the Commissioner of Income Tax (E) [in short, “CIT(E)”], Chandigarh, who, while passing an order under Section 80G(5)(vi) of the Act denied approval vide order dated 30.11.2015 primarily on the ground that the assessee was spending more than 5 per cent of total receipts for religious purposes as pooja expenses and telecast expenses. The assessee filed an appeal before the Tribunal. Vide order dated 11.08.2017, Annexure A.2, the Tribunal allowed the appeal, in view of the fact that the assessee had been granted exemption under Section ITA No. 50 of 2018 3

We have heard the learned counsel for the appellant-revenue.

Memorial Hospital Trust’s case (supra), on which heavy reliance has been placed by learned counsel for the revenue. In the said case, the assessee claimed registration under Section 12AA of the Act, which was granted. Simultaneously, exemption under Section 80G of the Act was also approved. Thereafter, the exemption under Section 80G of the Act continued to be granted year after year till the assessment year 2009-10. The assessee sought exemption for the assessment years 2010-11 to 2014- 15 through an application to the CIT(E) which was rejected on the ground that the assessee was generating substantial surplus and was spending only a percentage for charitable purposes. It was recorded that the assessee therein had deviated from its charitable objects. After examining the relevant statutory provisions and the case law on the point, it was held by this Court that grant of exemption under Section 10(23C) and registration under Section 12AA of the Act in favour of an institution would be essential and persuasive factor for the grant of exemption under Section 80G of the Act though that by itself may not be sufficient to do so. There is ITA No. 50 of 2018 4

Admittedly, in the present case, the application for grant of approval of under Section 80G(5)(vi) of the Act was filed by the respondent-assessee on 11.05.2015 before the CIT(E). The said approval was denied on the ground that the assessee was spending more than 5 per cent of the total receipts for religious purposes as pooja expenses and telecast expenses. The CIT(E) had also accorded approval under Section 12AA of the Act on 30.11.2015 itself as is evident from the order of the Tribunal. The Tribunal had recorded that the assessee had demonstrated that spending more than 5% of total receipts for religious purposes as pooja expenses and telecast expenses was justified. Further, as noticed by CIT(E) in the order dated 30.11.2015 denying approval to the assessee under Section 80G(5)(vi) of the Act, the aims and objects of the assessee as per Memorandum of Association are noticed to be as under:- “i). The main objects of the society to create and spread spiritual awakening among the common masses: ii). To spread teachings of great Indian Saints. iii) organise gathering of the people desirous to be benefitted from the spiritual teachings. iv) Publicise teachings and philosophy of great saints through press etc. v). Extend financial assistance to the poor, destitute for their economic upliftment and education etc.” Accordingly, it was recorded by the Tribunal that since assessee had been granted exemption under Section 12AA of the Act which was in existence and in case of any violation, the same was subject to variation/withdrawal

Learned counsel for the appellant-revenue has not been able to controvert the findings recorded by the Tribunal warranting interference by this Court. Thus, no substantial question of law arises. Consequently, the appeal stands dismissed.