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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
Before: SHRI B. RAMAKOTAIAH & SHRI CHALLA NAGENDRA PRASAD
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA No. 286/Hyd/2017 Assessment Year: 2015-16 Shri T. Subbirami Reddy vs. CIT, Exemptions, Lalita Kala Parishat, Hyderabad. Hyderabad. PAN – AABTT8627R (Appellant) (Respondent) Assessee by : Shri A.V Raghuram Smt. A Rajvanshi Jain Revenue by : Date of hearing 19.07.2018 Date of pronouncement 20.07.2018
O R D E R PER CHALLA NAGENDRA PRASAD, JM:
This appeal is filed by the assessee against the order of the Ld. DIT(E), Hyderabad dated 30.11.2016, passed u/s 80G(5)(vi) of the IT Act for the A.Y 2015-16 rejecting the assessee’s application for approval u/s 80G of the IT Act.
Ld. Counsel for the assessee referring to the order passed by the Ld. DIT(E) submitted that the application for approval u/s 80G of the IT Act was denied by the Ld. DIT(E) on the ground that the object of the trust was to promote Religious activities and to conduct activities in abroad and one more reason for denial of approval u/s 80G of the IT Act was that the assessee spent more than 5% of the total income on the occasion of Mahashivarthri, wherein the assessee trust
2 ITA No. 286/Hyd/2017 T. Subbirami Reddy Lalita kala Parishat, Hyderabad. performed one crore sivalinga prathista and Abhishekam on 07.03.2016 at Ramakrishna Beach, Visakhapatnam.
Ld. Counsel for the assessee submitted that for these reasons the Ld. DIT(E) rejected the approval for 80G of the IT Act. Ld. Counsel for the assessee referring to page 92 of the paper book which is the supplementary trust deed submitted that the trust deed has been amended restricting the activities of the trust to Indian territory in the clause-V, wherein from the original trust deed the word ‘abroad’ has been removed by restricting the activities only to Indian territory. Ld. Counsel for the assessee further submitted that the supplementary trust deed was in fact placed before the Ld.DIT(E) in the course of hearing in the course of 12A proceedings. Ld. Counsel for the assessee further submitted that the observation of the Ld. DIT(E) that the assessee incurred expenditure in excess of prescribed limit of 5% of total income towards religious activities is also not correct. Referring to page No. 77 of the paper book which is the statement of amount utilized during the year 2014-15 for the purpose of the objectives of the trust, submitted that the total expenditure incurred by the assessee trust was only Rs. 21,50,679/- and none of these expenditure has been incurred on the event of one crore Shivalinga Prathistha and Abhishekam on 07.03.2016 as observed by the
3 ITA No. 286/Hyd/2017 T. Subbirami Reddy Lalita kala Parishat, Hyderabad. Ld. DIT(E). Ld. Counsel for the assessee further submitted that this query was not put to the assessee so as to submit its reply before the Ld.DIT(E). Ld. Counsel for the assessee further submitted that all the vouchers have been produced for verification and therefore there is no justification in observing that assessee has incurred more than 5% of the total income on the above said event. Thus the Ld. Counsel for the assessee submitted that there is no justification in rejecting the approval u/s 80G of the IT Act.
On the other hand, Ld. DR supported the orders of the CIT(E).
Heard rival submissions, perused the order of the Ld. DIT(E) and the paper book placed before us. From the supplementary trust deed which is placed at page No. 92 of the paper book, we noticed that clause-7(A)(v) of the original trust deed has been amended restricting the activities to the Indian territory by removing the word “abroad”. We also noticed from the financials of the assessee for the year 2014-15 that the total expenditure incurred was Rs. 21,50,679/- out of which an amount of Rs. 11,69,668/- only was spent on cultural activity programs and this cultural programs were conducted to Honour Film personalities and others. This is evident from the note on
4 ITA No. 286/Hyd/2017 T. Subbirami Reddy Lalita kala Parishat, Hyderabad. activity submitted before the Ld. DIT(E), which is placed at page No. 50 of the paper book. Therefore, the conclusions drawn by the Ld. DIT(E) that more than 5% has been incurred on religious activities appears to be not correct. Taking the totality of the facts and circumstances into consideration, we feel it appropriate to restore the issue to the file of the Ld. DIT(E) for re-examination of the facts and to pass orders in accordance with law, considering the submissions of the assessee. Thus, we restore the issue to the file of the Ld. DIT(E) for de-novo consideration.
In the result, the appeal filed by the Assessee is allowed for statistical purposes.
Pronounced in the open Court on 20th July, 2018.
Sd/- Sd/- (B. RAMAKOTAIAH) (CHALLA NAGENDRA PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 20th July, 2018 KRK Copy to:- 1) TSLKP C/o A.V. Raghu Ram, Advocates, 610, Babukhan estate, Basheerabagh, Hyderabad-1 2) DIT(Exemptions), Hyderabad.. 3) The Departmental Representative, I.T.A.T., Hyderabad. 4) Guard File