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Income Tax Appellate Tribunal, “C” Bench, Mumbai
O R D E R Per B.R. Baskaran, AM :-
The appeal filed by the assessee is directed against the order dated 19.02.2014 passed by Ld CIT(A)-1, Mumbai and it relates to the assessment year 2010-11. The assessee is aggrieved by the decision of the Ld CIT(A) in confirming the assessment of Rs.82.33 lakhs relating to unutilised balance of funds collected for Gujarat Earthquake Relief Fund.
None appeared on behalf of the assessee even though the notice of hearing was sent to the assessee by Registered Post on more than one occasion. Hence we proceed to dispose of the appeal ex-parte, without the presence of the assessee.
We heard Ld D.R and perused the record. From the examination of Income and Expenditure account of the assessee, the AO noticed that the 2 Chief Minister’s Relief Fund (CMRF) unutilised amount of donations collected for relief of Gujarat Earthquake victims was not transferred to the Prime Minister’s National Relief fund by 31.3.2004 as mandated under sec. 80G(5C)(iv) of the Act. Hence the AO took the view that the same is taxable and accordingly assessed the same as income of the assessee. The Ld CIT(A) also confirmed the same.
We have carefully gone through the provisions of sec. 80G of the Act. The said section provides for deduction in respect of donations given to certain funds, charitable institutions etc. Under sec. 80G(2)(d), any sum paid by an assessee, during the period beginning on 26th day of January 2001 and ending on 30th day of September, 2001 to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat. Hence the persons who are contributing funds by way of donations to the trust, institution or fund established for providing relief to the victims of earthquake in Gujarat are eligible for deduction u/s 80G of the Act.
The provisions of sec. 80G(5C) puts further restrictions and states that the deduction prescribed in sec. 80G(2)(d) shall be given only if the trust or institution or fund is established in India for a charitable purpose and it fulfils the conditions prescribed therein. One of the conditions is that the amount remaining unutilised on the 31st day of March, 2004 should be transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, 2004. On a combined reading of the provisions of sec. 80G(2)(b) and sec. 80G(5C), we are of the view that the non-compliance of conditions prescribed in sec. 80G(5C) will only disenable the donors from claiming deduction u/s 80G of the Act. Accordingly we are of the view that the taxability or otherwise of the unutilised balance shall be governed by the provisions of sec. 10(23C)(iv) of the Act.
3 Chief Minister’s Relief Fund (CMRF)
We notice that the tax authorities have assessed the impugned amount for non-compliance of conditions prescribed in sec. 80G(5C). We have observed that the taxability of the impugned amount is required to be examined in terms of the provisions of sec. 10(23C)(iv) of the Act. The year of taxability of the same is also required to be examined. Accordingly, we are of the view that this issue requires fresh examination at the end of the assessing officer. Accordingly, we set aside the order of Ld CIT(A) passed on this issue and restore the same to the file of the assessing officer for examining the same afresh. The assessee is also directed to extend full co-operation to the AO for completing the set aside proceedings expeditiously.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order has been pronounced in the Open Court on 9.6.2016.