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ITA 169/2019 1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2021 PRESENT
THE HON’BLE MR.JUSTICE SATISH CHANDRA SHARMA AND
THE HON’BLE MR. JUSTICE S.VISHWAJITH SHETTY
I.T.A.No.169/2019 BETWEEN: Pr.Commissioner of Income Tax, Exemptions, Unity Building Annexe, Mission Road, Bangalore-560 027.
… APPELLANT
(By Sri E.I.Sanmathi, Adv.)
AND:
M/s. OLA Foundation, Economic Laws Practice, Rockline Centre, 6th Floor, No.54, Richmond Road, Bengaluru-560 025.
… RESPONDENT
(By Sri Ajay.J.Nandalike, Adv.)
This Income Tax Appeal is filed under section 260-A of Income Tax Act 1961, arising out of order dated 26.10.2018 passed in ITA No.215 /Bang/2018, for Assessment Year 2017-2018, praying to decide the foregoing question of law and /or such other questions of law as may be formulated by the Hon’ble Court as deemed fit, etc.
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This appeal coming on for Admission, this day, Satish Chandra Sharma J., delivered the following:
JUDGMENT
The present appeal is arising out of the order dated 26.10.2018 passed in ITA No.215/Bang/2018 by the Income Tax Appellate Tribunal, Bengaluru, (ITAT) (Shri Darshan Bora Vs Shri Deva Rathna Kumar.K., CIT).
The facts of the case reveal that the respondent- assessee before this Court is a Charitable Trust which came into existence pursuant to the Trust Deed dated 14.12.2016. The aim and object of the Trust reveals that it was formed to provide education and the assessee made an application to the CIT (Exemption), Bengaluru , on 16.05.2017, for grant of registration under Section 12A of the Income Tax Act, 1961 (for short, ‘I.T.Act’), and also an application at the same time seeking approval under Section 80G of the Income Tax Act, 1961. The CITE, Bengaluru, granted registration under Section 12A of the I.T.Act, by an order dated 24.11.2017, meaning thereby, prima facie he was satisfied that the objects of the assessee are charitable in nature within the
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meaning of Section 2(15) of the Act and that the activities of the trust were genuine. However, a final order was passed by the CITE on 24.11.2017, rejecting the application of the assessee for grant of approval under Section 80G of the I.T.Act. Against the order of the CITE, an appeal was preferred before the Appellate Tribunal, which was allowed. The CITE was of the opinion that the Trust after its registration has not carried out the activities which were charitable in nature and while setting aside the order of the CITE, the Tribunal after placing reliance upon the DIRECTOR OF INCOME-TAX (EXEMPTIONS) VS MEENAKSHI AMMA ENDOWMENT TRUST – (2013) 354 ITR 219, has set aside the order, meaning thereby has allowed the application of the assessee i.e., the approval under Section 80G of the Income Tax Act.
After hearing the learned Counsel for the parties, the appeal is admitted on the following substantial questions of law. (i) Whether on the facts and in the circumstances of the case, the Tribunal is right in directing the respondent to grant registration under Section
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80G of the Act ignoring the fact that though the assessee-Trust was formed on 14.12.2016, no activities were carried on by it till the date of application for approval under Section 80G of the Act?
(ii) Whether on the facts and in the circumstances of the case, the Tribunal is right in not appreciating the fact that the assessee has failed to prove with financial statements and activities carried out earlier, that they are charitable in nature as provided under Rule 11AA(3) of the Rules, 1962?
(iii) Whether on the facts and in the circumstances of the case, the Tribunal is right in not considering the fact that satisfaction on the part of the authority granting approval for recognition under Section 80G is necessary in terms of Section 80G of the Act read with Rule 11AA of the Act?
(iv) Whether on the facts and in the circumstances of the case, the Tribunal is right in not following the decision of the jurisdictional High Court in the case of Ganjan Nagappa & Son Trust (supra). Wherein, it has been held that “grant of exemption or renewal is not
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automatic in character”, in allowing the assessee’s appeal?
Learned Counsel for the assessee has vehemently argued before this Court that a Division Bench of this Court in I.T.A.No.320/2014 has answered the similar question of law in favour of the assessee. The order passed by the Division Bench of this Court reads as under:
“We have heard Sri E.I.Sanmathi, learned Counsel for the appellant and perused the record.
These appeals have been filed raising the following substantial question of law: “Whether the Tribunal was correct in holding that the assessee trust must be granted registration under Section 12A and recognition under Section 80G of the Income Tax Act despite the fact that it had not commenced activities and therefore, failed to satisfy the conditions laid down in Section 12AA(1)(b) of the Act?”
Learned Counsel for the appellant does not dispute the fact that the question involved in these appeals is squarely covered by the judgment of this Court rendered in the case of Director of Income Tax
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(Exemptions) Vs. Meenakshi Amma Endowment Trust (2013) 354 ITR 219 (Karn).
For the reasons given in the judgment of a co-ordinate Bench of this Court in the aforesaid case, we are of the opinion that no substantial question of law arises for determination by this Court. The appeals are accordingly dismissed. There shall be no order as to costs.
In the light of the judgment delivered by the Division Bench, as the lis involved has already been decided, the questions framed are answered in favour of the assessee and against the revenue. Resultantly, the appeal stands dismissed.
Sd/- JUDGE
Sd/- JUDGE