M/S. KOURAVA EDUCATION SOCIETY,HAVERI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BENGALURU

PDF · subscribers
ITA 1821/BANG/2019Status: DisposedITAT Bangalore09 September 2020AY 2019-203 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(Exemptions) failed to examine the compliance of various conditions prescribed under Section 80G(5) and drew an adverse inference solely based on excess income. The Tribunal set aside the CIT's order and restored the application for fresh consideration.

What were the facts?

The assessee, M/s. Kourava Education Society, applied for recognition under Section 80G of the Income Tax Act. The CIT(Exemptions) rejected the application, citing excess income over expenditure in the past two financial years as evidence of not carrying out charitable activities.

What were the issues?

Whether the CIT(Exemptions) properly examined the conditions for recognition under Section 80G(5) or wrongly rejected the application based on excess income without assessing the genuineness of activities.

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE

Before: SHRI GEORGE GEORGE K. & SHRI B.R. BASKARAN

For Appellant: Shri Sanketh Nayak, A.R
For Respondent: Shri Sunil Kumar Singh, D.R
Hearing: 08.09.2020Pronounced: 09.09.2020

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

1.

The assessee has filed this appeal challenging the order dated 28.6.2019 passed by Ld. CIT(Exemptions), Bengaluru rejecting the application filed by the assessee seeking recognition u/s 80G(5)of the Income-tax Act,1961 ['the Act' for short].

2.

We heard the parties and perused the record. We notice that the assessee has submitted application seeking recognition u/s 80G of the Act before Ld. CIT(Exemptions) on 27.12.2018. The Ld. CIT(E) called for certain details and the same was furnished by the assessee. The Ld. CIT noticed that the assessee trust has generated excess of income over expenditure in the past two financial years. Accordingly,

M/s. Kourava Education Society, Hirekarur

Page 2 of 3 he took the view that th assessee has not carried out charitable activities and accordingly rejected the application of the assessee with the following observations:

“The reply submitted has been examined. As verified from the documents and financials submitted, the trust was granted registration u/s 12AA on 18.9.2018 as a trust with salient activities as education, medical relief, advancement of any other object of general public utility. As per the financials submitted by the trust in past two financial years the society has excess of income over expenditure. At the stage of recognition u/s 80G, the Commissioner in receipt of an application for recognition has to satisfy hikself about the objects of the trust or institution and the genuineness of its activities. In this connection, reliance is placed on the following decisions:- a) “The Hon’ble Karnataka High Court in the case of Ganjam Nagappa and Son Trust Vs. DIT€ reported in 269 ITR 59 have held that “Grant of exemption or renewal is not automatic in character. b) Hon’ble Kerala High Court in the case of Self Employers Institution Vs. CIT reported in 247 ITR 18 has held that where there is no material before the Commissioner to be satisfied of the genuineness of the activities of the trust is a valid reason for rejection. In the circumstances, the application for grant of recognition u/s 80G(5)(vi) of the I.T. Act, 1961, is hereby rejected. The assessee may re-apply at a later date after carrying out charitable activities.”

3.

The provisions of section 80G(5) of the Act prescribes the conditions for recognizing a charitable trust u/s 80G of the Act. We notice that the Ld. CIT(E) has not examined the compliance of various conditions prescribed in section 80G(5) of the Act. Instead the Ld. CIT(E) has drawn adverse inference only for the reason that the assessee has generated excess of income over expenditure in the past two financial years, meaning thereby, the Ld. CIT(E) did not examine the activities carried on by the assessee and also compliance of M/s. Kourava Education Society, Hirekarur Page 3 of 3 various conditions prescribed u/s 80G(5) of the Act. The two case laws referred to by Ld. CIT(E) have been rendered in the context of facts prevailing in those cases. However, no such kind of deficiency has been pointed out by Ld. CIT in order to draw support of his decision. Under these set of facts, the order passed by Ld. CIT(E) cannot be sustained. Accordingly, we set aside the order passed by Ld. CIT(E) and restore the same to his file for processing the application of the assessee in accordance with law.

4.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 9th Sept, 2020

More judgments on Section 80G

All 6,482 judgments and leading authorities on Section 80G →

Recent GST High Court judgments

Search GST case law →