C I T JAIPUR vs. M/S BALAJI CHARITABLE TRUST

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ITA/358/2011HC RajasthanRJHC02044582200916 December 2011Author: ARUN MISHRA,NARENDRA KUMAR JAIN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT's findings were not perverse and could not have been arrived at in the facts and circumstances of the case. The court noted that the assessee had filed the donation receipt and the certificate under Section 80G of the donee trust, which was relied upon. The court considered this a matter of sufficiency of evidence for granting the benefit. The High Court found no substantial question of law involved in the appeal. Consequently, the appeal was dismissed. The ITAT had previously held that when the donee trust had a valid Section 80G certificate from the department, the CIT should not doubt the donee trust's objects solely due to the absence of its literature with the assessee. The ITAT also found no bar in Section 80G for making donations from available funds and that the minutes of the Direct Taxes Advisory Committee were not binding. The ITAT had set aside the refusal order and directed the CIT to grant approval under Section 80G.

What were the facts?

The assessee, M/s Balaji Charitable Trust, Jaipur, made a donation of Rs. 7,00,000 to Mahabir Prasad Jatia Charitable Trust on August 20, 2007. The assessee provided a receipt for the donation and a certificate under Section 80G of the Income Tax Act, 1961, obtained by the donee trust, to the Assessing Officer. However, literature of the donee trust was not furnished. The Assessing Officer denied the benefit of Section 80G, finding that the donee trust's activities violated its objects and Section 2(15) of the Act, and that the conditions for Section 80G were not met. The Income Tax Appellate Tribunal (ITAT) allowed the assessee's appeal, setting aside the denial order and directing the Commissioner of Income Tax (CIT) to grant approval under Section 80G.

What were the issues?

1. Whether the respondent (assessee) could have been granted approval under Section 80G of the Income Tax Act, 1961, when literature of the donee charitable trust was not furnished to the Assessing Officer. Assessee's contention (as argued by the Revenue's counsel in the High Court): The assessee's counsel argued that since the donee trust, Mahabir Prasad Jatia Charitable Trust, had been issued a certificate under Section 80G by the competent authority, the CIT should not have doubted the objects of the donee trust. The ITAT rightly noted that there is no express bar on making donations out of available funds of the trust to any extent. The ITAT also found that the minutes of the Direct Taxes Advisory Committee (Central) regarding donations from Corpus Fund were not binding as they had not been implemented by the legislature or any competent authority. Revenue's contention (as argued by the Revenue's counsel in the High Court): The Revenue argued that the literature of the donee charitable trust was not submitted, and therefore, it was not appropriate to grant the benefit of Section 80G of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80G,Section 2(15)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
(1) DB INCOME TAX APPEAL NO. 358/2011 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. INCOME TAX APPEAL NO.358/2011 COMMISSIONER OF INCOME TAX-I, JAIPUR Vs. M/s BALAJI CHARITABLE TRUST, JAIPUR DATE: 16.12.2011 HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA HON'BLE MR. JUSTICE NARENDRA KUMAR JAIN-I Mr. Anuroop Singhi with Mr. O.P. Pareek, for the appellant. **** Heard on the question of admission. The order passed by the Income Tax Appellate Tribunal, Jaipur has been challenged by filing the instant appeal. The question raised is whether respondent could have been granted approval under Section 80G of the Income Tax Act, 1961. The factual matrix indicates that donation of Rs.7,00,000 was given to Mahabir Prasad Jatia Charitable Trust, Jatia Chambers, 60, Dr. V.B. Gandhi Marg, Mumbai after obtaining receipt dated 20.08.2007; a copy of the receipt was produced before the Assessing Officer; a certificate was also obtained from the donee trust for exemption under Section 80G and a copy of certificate was also furnished before the Assessing Officer, however, literature of the trust was not furnished before the Assessing Officer. (2) DB INCOME TAX APPEAL NO. 358/2011 The Assessing Officer found that the activities of the trust were in violation to its objects and not for the purposes as laid down in Section 2(15) of the Income Tax Act, 1961 and conditions laid down under Section 80G of the Act were also not fulfilled. The Income Tax Appellate Authority has allowed the appeal while making the following discussion in para 5 of

the order:- “5. Considering the above submissions we find substance in the contention of the Ld.AR that when the donee trust M/s Mahaveer Prasad Jatia Charitable Trust to whom the appellant had donated Rs.7 Lac was issued certificate under Section 80G by the competent authority of the department, there was no reason with the Ld.CIT to doubt the objects of the donee trust as not charitable only because no literature of the donee trust was available with the assessee during the proceedings on the basis of which Ld.CIT drew an inference that the appellant had not verified the objects of the donee trust before giving the said donation. We also agree with the submissions of Ld.AR that there is no bar on making donations out of available funds of the trust to any extent as S.80G does not prohibit the same expressly and specifically. So far as the official minutes of the meeting held by Direct Taxes Advisory Committee(Central) on the issue of donations out of Corpus Fund, referred by the Ld.CIT is concerned, the Ld.CIT has not pointed out that the advise of the Direct Tax Advisory Committee (Central) on the issue has been implemented by the legislature or any other competent authority. We are thus of the view that the minutes of the said committee on the issue is not binding in nature. Under these circumstances, we thus while setting aside the refusal order in question direct the Ld.CIT concerned to grant approval of S.80G as prayed for by the appellant before him. The ground is accordingly allowed.” Shri Anuroop Singhi, Counsel appearing on behalf of appellant has submitted that literature of the donee

(3) DB INCOME TAX APPEAL NO. 358/2011

charitable trust was not submitted, therefore, it was not appropriate to give the benefit of Section 80G of the Income Tax Act. After hearing the Counsel for the appellant at length, we are of the opinion that receipt was filed; certificate under Section 80G of the Act of donee was also submitted, which has been relied upon. It is a matter of sufficiency of the evidence to grant benefit and it cannot be said that findings recorded by the Income Tax Appellate Tribunal are perverse or which could not have been arrived at, in the facts and circumstances of the case. We do not find any substantial question of law involved in this appeal and the same is, accordingly, dismissed. (NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. /KKC/

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