CHAIN FOUNDATION,HYDERABAD vs. COMMISSIONER OF INCOME TAX, EXEMPTIONS, HYDERABAD

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ITA 1315/HYD/2017Status: DisposedITAT Hyderabad03 August 2018AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal remitted the issue back to the CIT(E) to consider the amended trust deed and grant approval under Section 80G after providing an opportunity of being heard.

What were the facts?

The assessee trust applied for approval under Section 80G, but the CIT(E) rejected it due to a religious object clause and lack of charitable activities. The assessee later amended the trust deed to remove the objectionable clause.

What were the issues?

Whether the amended trust deed rectifies the deficiencies that led to the rejection of the Section 80G approval application.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri Sanjay Kumar Sharda, Smt. Alka Rajvanshi Jain
Hearing: 30/07/2018Pronounced: 03/08/2018

PER S. RIFAUR RAHMAN, A.M.:

This appeal filed by the assessee is directed against the order dated 28/04/2017 of CIT(Exemptions), Hyderabad for AY 2016-17.

2.

Brief facts of the case are, the assessee, a trust, filed application in Form No. 10G on 19/10/2016 seeking approval u/s 80G of the Income-tax Act, 1961 (in short ‘the Act’). Earlier, the trust was granted registration u/s 12AA of the Act vide order dated 27/06/2016.

2.1 The CIT(E) issued a letter dated 16/01/2017 requiring the assessee to produce its original Memorandum of Association for verification and to furnish detailed reply on specific points. On verification of the information filed by the assessee, the CIT(E) found that the object at Sl. No. ‘r’ of the objects is ‘to publish and distribute text and note-books, study materials to persons interested in studying Bhagavadgeetha, vedas, Upanishads and philosophical books of the

2 ITA No. 1315/Hyd/17 Chain Foundation, Hyd. like nature, which is religious in nature. Further, he observed that as per the information filed by the assessee, the assessee trust had not undertaken any charitable activities except donating Rs. 4 lakhs to M/s Agarwal Seva Trust in the last four years and most of the income received was spent only towards salaries to staff, audit fee, and other miscellaneous expenditure and no charitable activity was undertaken. When asked to explain how the assessee trust is eligible for approval u/s 80G of the Act, the assessee trust could not give any clarification on the religious object at Sl.No. ‘r’ and no clarification was given on the charitable activities undertaken in the previous three years except giving donation to another trust. In view of the above observations, the CIT(E) rejected the application filed for approval u/s 80G in Form No. 10G.

3.

Aggrieved by the order of CIT(E), the assessee is in appeal before us.

4.

Before us, ld. AR of the assessee invited our attention to the letter dated 30/04/2018 addressed to the DIT(E), which is on record, wherein it was enclosed a copy of amended trust deed dated 11/05/2017 to submit that the clause ‘r’ was amended and, therefore, the matter may be remitted back to the CIT(E) for considering the same and grant approval u/s 80G to the assessee.

5.

Ld. DR, on the other hand, conceded to the submissions of the of the ld. AR.

6.

Considered the rival submissions and perused the material on record. As submitted by the ld. AR of the assessee, the assessee filed before the department the amended trust deed dated 11/05/2017 wherein the clause ‘r’ amended as under: Original clause:

3 ITA No. 1315/Hyd/17 Chain Foundation, Hyd. ‘r’: to publish and distribute test note books, study materials to persons interested in studying Bhagavadgeetha, Vedas, Upanishads and Philosophical books of the like nature. Amended clause: ‘r’ : To publish and distribute text and note books, study materials to persons interested in studying philosophical note books. In view of the above, we remit the issue back to the file of CIT(E) with a direction to consider the amended clause and grant approval to the assessee u/s 80G in accordance with law after providing reasonable opportunity of being heard to the assessee in the matter. Accordingly, grounds raised by the assessee are allowed for statistical purposes.

7.

In the result, appeal of the assessee is allowed for statistical purposes. Pronounced in the open Court on 3rd August, 2018.

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated: 3rd August, 2018 kv Copy to:- 1) Chain Foundation, H.No. 11-6-27/17, Balanagar, Opp. IDPL, Balanagar, Hyderabad – 500 037 2) CIT(E), Hyderabad. 3) Addl. CIT(E), Hyderabad. 4) ITO(E) - 1, Hyd. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File

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