GARGADEEN NIRANJAN LAL DATA CHARITABLE TRUST,ALWAR vs. CIT (EXEMPTION), JAIPUR

PER SHRI KUL BHARAT, JM.

This Appeal by the Assessee is directed against the order of Ld. CIT(E), Jaipur

dated 27.04.2017 pertaining to A.Y. 2017-18.

The Solitary ground has raised in this appeal that reads as under:-

“That the Ld. CIT(Exemption), Jaipur has erred in law as well as on the facts and circumstances of the case in rejecting the application of the assessee trust for granting of registration certificate u/s 80G of the Income Tax Act, 1961. The Ld. CIT(Exemption) has rejected the application on frivolous grounds, which have no bearing on the on granting of exemption u/s 80G of the Income Tax Act 1961.”

seeking approval of u/s 80G(5)(vi) of the Income Tax Act 1961 (hereinafter referred

to as the Act).

2 ITA No. 535/JP/2017. Gangadeen Niranjan Lal Data Charitable Trust, Alwar.

rejected the application on the ground that the assessee has not carried out any

significant charitable activities. Against this, the assessee preferred the present

appeal.

registration u/s 12AA of the Act and has carried out charitable activities which have

been reproduced by the Ld. CIT. The only objection of the Ld. CIT is that no

significant charitable activity was carried out. He contended that, there is no

requirement of law for carrying out of significant charitable activity. He is submitted

under these facts when Ld. CIT has not given any adverse finding regarding the

activities carried out by the assessee, the approval u/s 80G(5)(vi) of the Act.

submissions of the Ld. Counsel for the assessee and supported the order of the Ld.

CIT.

Ld. CIT in Para 4 has recorded the fact with regard to the activity carried out by the

assessee. It is observed by the Ld. CIT that the activity which has been carried out

by the assessee is not the significant charitable activity. Therefore, he was of the

view that the case is not fit for granting exemption u/s 80G at this stage. In the sake

of clarity the observation of the Ld. CIT has record in para 5 of his impugned order

are reproduced herein below:-

“5. On examination of the above charity account, it is seen that no significant activities has been started by the applicant as per the objects. The trust came into existence on 21/07/2016 and in period of more than eight months no significant charitable activity has been

3 ITA No. 535/JP/2017. Gangadeen Niranjan Lal Data Charitable Trust, Alwar.

commenced. Seeing the insignificant nature of activity the case does not seems to be fit for granting exemption u/s 80G at this stage.”

6.1 From the above it can be inferred that there was no objection with regard to

the genuinity of the activity. It is only the volume of activity carried out by the

assessee. Ld. CIT’s objection is that in 8 months no significant charitable activity

has been carried out. In the light of these undisputed facts, we need to examine

whether the law mandates significant charitable activities to be carried out for

become eligible to be registered u/s 80G(5)(vi) of the Act.

6.2 As per 80G(5), the provisions of Section applies to donations to any institution

or fund referred to in sub clause (iv) of clause (a) of sub-section(2), only if it is

established in India for a charitable purpose and if it fulfills the followings conditions.

(i) Where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of section 11 and 12 of section 10. [Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if- (a) The institution or fund maintains separate books of accounts in respect of such business. (b) The donation made to the institution or fund are not used by it, directly or indirectly, for the purpose of such business and (c) The institution of fund issued to a person making the donation a certificate to the effect that it maintains separate books of amount in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purpose of such business.

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(ii) The instrument under which the institution or fund is constituted does not, or the rules governing the institution of fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose. (iii) The institution or fund is not expressed to be for the benefit of any particular religious community or case; (iv) The institution of fund maintains regular accounts of its receipts and expenditure. (v) The institutions of fund is either constituted as a public charitable trust or this registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognized by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority. In relation to donations made after the 31st day of March, 1992, the (vi) institution or fund is for the time being approved by the commissioner in accordance with the rules made in this behalf.”

6.3 Further, as per Rule 11AA(3) of Income Tax Rules, 1962, The Commissioner

may call for such documents or information from the institutions or funds or cause

such inquiries to be made as he may deem necessary in order to satisfy himself

about the genuineness of the activities of such institutions or funds. As per Rule

11AA(5), The Commissioner may reject the application for approval, after recording

the reasons for such rejection in writing, where he satisfied that one or more

conditions laid down in clauses (i) to (v) of Sub-section (5) of Section 80G are not

5 ITA No. 535/JP/2017. Gangadeen Niranjan Lal Data Charitable Trust, Alwar.

fulfilled. From the above statutory provisions it is clear that the Commissioner can

reject the application for approval if he is satisfied that one or more conditions laid

down in clauses (i) to (v) sub-section (5) of section 80G are not fulfilled.

In the present case, Ld. CIT has not recorded any reason that the assessee has

failed to fulfill the conditions laid down in clauses (i) to (v) of sub-section (5) of

section 80G are not fulfilled. Under these undisputed facts, we are unable to affirm

the view of the Ld. CIT, therefore, we direct him to grant approval u/s 80G(5) of the

Act.

statistical purpose. Order is pronounced in the open court on Thursday, the 10th day of August 2017. Sd/- Sd/- ( HkkxpUn ½ ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 10/08/2017 Pooja/

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

6 ITA No. 535/JP/2017. Gangadeen Niranjan Lal Data Charitable Trust, Alwar.