PR. COMMISSIONER OF INCOME TAX II vs. SATNA SEVA BHARTI

ITA-80-2015 (PR. COMMISSIONER OF INCOME TAX II Vs SATNA SEVA BHARTI) 28-10-2015 Shri S. Lal, learned counsel for the appellant. Having heard learned counsel for the parties, we find that in this appeal filed under Section 260-A of the Income Tax Act by the Revenue, the following question of law has been indicated for consideration :- “Whether on the facts and circumstance of the case, the order of the Ld. Tribunal is perverse on the facts in directing the Commission of the Income Tax to grant approval u/s 80G(5)(vi) overlooking the grounds of rejection as evidenced in the order of the Commissioner of Income Tax dated 28.06.2013 and relying on additional evidence submitted before Tribunal by the assessee without subjecting it to verification by the Commissioner?”

The assessee claim to be a trust and sought exemption and approval under Section 80G(5)(vi) of the Income Tax Act. The competent authority examined the matter and in Para – 2 of its order found that the object of the trust as is indicated in Para – 1 reproduced and thereafter found that the committee has shown expenses under three headings namely “Matrachaya Expenses”, “Project Expenses” and “Seva Bharti” Expenses. However, after going though various vouchers and documents of expenditure, the Commissioner found that except for filing some vouchers pertaining to purchase of food items which was said to be used for the orphans in the Matrachaya, no vouchers or documents are adduced to say as to what are the expenses incurred under the heading Project Expenses and Seva Bharti Expenses and as to how these expenses are relating to the utility and work of the trust. Finding that the expenses for furthering the object of the trust is not established, the application under Section 80G(5)(vi) was rejected by holding that the requirement of the said statute has not been fulfilled. However, when the matter was re- examined by the appellate Tribunal, at the instance of the assessee, the Tribunal did not deal with the finding of fact recorded by the Commissioner as indicated hereinabove. Instead, in a very causal manner held that they have gone though the record and found that the trust is entitled for exemption and granted exemption. In our considered view, the question of law relating to perversity of the finding clearly established. In the present case while dealing with the matter the Commissioner has given cogent reason to say that the expenditure incurred for purpose of the trust is not established while interfering with this finding, the learned Tribunal has not given any reason as to why this finding is incorrect and how it can be said to be contrary to the evidence available on record. The Tribunal should have considered the evidence available on record and then held as to why the finding of the Commissioner is unsustainable, as to what is the material available to show that the requirement of Section 80G(5)(vi) are fulfilled, therefore, exemption can be granted. The Tribunal has not discharged these responsibilities properly, instead, in a very casual manner, the appeal has been decided and the approval granted under Section 80G(5)(vi). In our view, the Tribunal has recorded a perverse finding and the question of law formulated to be answered in favour of the revenue. Accordingly, answering the question in favour of the revenue, we allow the appeal, quash the order and remand the matter back to the appellant Tribunal for re- consideration and deciding the matter afresh in accordance with law. Accordingly, the appeal stands disposed of. (RAJENDRA MENON) JUDGE (KESHAV KUMAR TRIVEDI) JUDGE