M/S. ABS FOUNDATION,FARIDABAD vs. CIT(E), CHANDIGARH

Briefly the facts of the case are that assessee filed application in prescribed form for grant of approval u/s 80G (5) of the I.T. Act. The assessee produced required documents before Ld. CIT (Exemption). Ld. CIT (Exemption) on perusal of the Income & Expenditure account for the year ending 31st March, 2014 noted that assessee has incurred the expenditure on following expenses :- Page 1 of 4 ABS Foundation vs. CIT(E)

The donation was paid to Dr. Thakur Singh Ikolaha Championship Trophy. Except this donation no major expense has been incurred towards charity within the meaning of section 2 (15) of the I.T. Act. Ld. CIT (Exemption) accordingly denied the grant of approval u/s 80G (3) of the I.T. Act.

We have heard Ld. Representative of both the parties and perused the findings of authorities below.

Ld. Counsel for assessee referred to Registration granted u/s 12AA of I.T. Act to the assessee dated 1st September 2014 by CIT Faridabad. Copy of which is filed in the paper book. He has relied upon decision of Hon’ble Gujarat High Court in the case of CIT vs. Vipassana Trust 55 taxman.com 57 (Gujarat) in which it was held that at the time of granting approval u/s 80G, only object of trust is required to be examined. It was also held that application seeking recognition u/s 80G (5) could not be rejected on ground that it had not spent 85% of amount towards object of the trust. He has also relied upon decision of Punjab and Haryana High Court in the case of CIT vs. O.P. Jindal Global University 38 taxman.com 366 in which it was held that at the time of ABS Foundation vs. CIT(E)

Considering the findings of the Ld. CIT(E) in the light of the above decision we are of the view assessee is entitled for grant of approval u/s 80G(5) of the I.T. Act. The assessee has filed copy of the registration order u/s 12AA (1)(b)(i) of the I.T. Act which is granted by CIT Faridabad holding that assessee exists for charitable purposes. Ld. CIT(Exemption) also did not deny in the impugned order that assessee exists for charitable purposes, however he was of the view that except single donation of Rs. 10 lacs no other expenses have been incurred towards charitable purposes. This was sole reason for rejecting the application u/s 80G(5) of the I.T. Act. It is therefore proved on record that all the conditions of section 80G(5) have been satisfied by the assessee. Therefore merely because no major expenses have been incurred towards charitable purposes is no ground to reject the application u/s 80G(5) of the I.T. Act. It is well settled law that at the time of granting approval u/s 80G(5), only the object of the trust is required to be examined. The decisions of Hon’ble Gujarat High Court in the case of CIT vs Vipassana Trust and Punjab and Haryana High Court in the case of CIT vs. O.P. Jindal Global University(supra) squarely applies to the case of the assessee. The application of fund or incurring of expenditure could be examined by the AO at the time of framing of the assessment. In this view of the matter, we set aside the impugned order and direct the Ld. CIT(exemption) to grant approval u/s 80G(5) of ABS Foundation vs. CIT(E)

In the result appeal of the assessee is allowed.