Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “D” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI & SHRI CHALLA NAGENDRA PRASAD
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal filed by assessee is directed against the order of the Commissioner of Income Tax-I, Tiruchirapalli, dated 28.05.2014 in refusing to grant recognition u/s. 80G of the Act.
The brief facts of the case are that the assessee trust was granted registration u/s.12A of the Income-tax Act, 1961 by the Commissioner I.T.A.No.1812/Mds/2014 :- 2 -: of Income Tax, Tiruchirappalli from the assessment year 1996-97 as a “Religious Trust”. The Trust has now filed an application in Form No.10G on 28.09.2012 for grant of approval u/s.80G(5) of the Act. The Trust was issued with a detailed questionnaire dated 8.10.2012 asking to give a detailed note on activities carried out by the Trust and to furnish necessary evidence regarding charitable activities genuinely carried on by the Trust. The trust was further asked to prove with the help of books of accounts, documents, vouchers and other necessary evidence that it did not carry out the activities stated in the object clause of the trust deed and these activities were charitable in nature as per definition u/s.2(15) of the Income Tax Act, 1961. The trust was specifically asked to submit the audited accounts statement for the last 3 years and show that income of the trust has been solely utilized for the purpose of the objects for which it was formed. The trust was also supposed to prove that the activities were carried out only in India and the benefits of the trust was available to all irrespective of case, religion, sex and the benefit were not confined to any of the religious community or caste. The trust ought to have furnished its reply within 30 days of receipt of the questionnaire letter. It was, however, noticed that no details as called for in the questionnaire were submitted by the Trust. A reminder letter dated 22.02.20123 was also served on the assessee trust on 26.02.2013.
Since the trust did not even respond to the said reminder, a final I.T.A.No.1812/Mds/2014 :- 3 -: opportunity was given to the Trust by posting a hearing on 14.03.2013 by issue of a letter dated 06.03.2013. Even to this letter, no reply was received and none on behalf of the Trust appeared on the hearing date.
In absence of any details being made available by the applicant trust, it is difficult to verify whether all the conditions prescribed in clause (i) to (iv) of sub-section (5)of section 80G r.w.s.80G(2)(iv) have been complied with or not. Further, in absence of and details being made available for verification, it is not possible to say definitely that charitable activities of the trust were carried out genuinely. The onus was on the assessee to prove that all the conditions stipulated u/s.80G have been complied with.
In the first round of litigation, this Tribunal by its order in ITA
No.1338/Mds/2013, dated 17.02.2014 remitted the issue back to the file of the Commissioner of Income Tax to consider the issue afresh after providing opportunity of hearing to the assessee. The Commissioner of Income Tax while giving effect to the order of the Tribunal dated 28.05.2014 again refused to grant recognition under section 80G as the assessee has not carried out the charitable activities as defined the trust deed. While holding so, the Commissioner of Income Tax observed as under:-
The trust proclaims as ‘’ social, educational and charitable trust’’ in form 10G filed on 128.03.2012, the core object of trust is centered in spreading Gospel which is “Religious” in nature as apparent from the objectives mentioned above. Perusal of the Income and Expenditure account put forth by the Trust, it was I.T.A.No.1812/Mds/2014 :- 4 -:
observed that Trust has incurred its income mostly towards religious activities rather than on charity and it was for this reason recognition u/sd.80G was not granted earlier. Even during the course of present hearing on 10.04.2014, the trust has failed to produce before the undersigned any subsequent evidences to prove that charitable activities are carried out substantially by the trust to become eligible for recognition u/s.80G. The trust got registration u/s. 12AA as ‘’religious trust’’ and expenses were incurred mostly towards religious activities as seen from the Income and Expenditure activities for the A.Y. 2008-09 to 2010- 11 filed alongwith the application.
Further, it is represented during the course of hearing that the Trust as of now incurred less than 5% of its expenditure towards religious activities, out of the total income of the A.Y. 2014-15. However, perusal of the income and expenditure account filed alongwith the application in form 10G dated 28.09.2012 for three assessment years viz. 2008-09, 2009-10 & 2010-11 shows that the Trust has incurred major portion of its income towards religious activities and this reason was taken into account while rejecting the application earlier. The ITAT has directed to consider the same application and pass fresh order after giving an opportunity. The statement adduced by the Trust during the course of hearing that it incurred less than 5% of its expenditure out of the total income only pertains to A.Y. 2014-15 the condition of which is claimed to have met the Trust ie. only recently, subsequent to filing of the application. The application field on 28.09.2012 which is reconsidered now is still devoid of any material evidence to show that the statutory condition of expenditure limit for grant of recognition u/s.80G is fulfilled by the Trust.
Further, I am not satisfied with the genuineness activities of the Trust to the extent that charitable activities as defined in the Trust deed are not substantially carried out by it. I am therefore unable to grant of recognition u/s.80G of the Income Tax Act, 1961 since the applicant trust has not complied with the requirements of section 80G of the Income Tax Act, 1961. Therefore, the earlier order dated 20.03.2013 rejecting the application filed by the trust for exemption u/s.80G stands effective”.
Against this, the assessee is in appeal before us.
We have heard both the parties and perused the material on record. The ld. counsel submitted that the assessee received donations which was only used for charitable and administrative I.T.A.No.1812/Mds/2014 :- 5 -: purposes and it was not used for any religious activities and this was not examined by the lower authorities and without examining this, recognition u/s.80G was denied. In our opinion, the argument of the Authorised Representative is misconceived. The Commissioner of Income Tax has given categorical finding in his order that for the assessment years 2008-09, 2009-10 and 2010-11, the assessee has incurred major portion of its income towards religious activities and there is no error in the order of Commissioner of Income Tax. Being so, we have no hesitation in confirming the Commissioner of Income Tax order. Thus, the ground raised
by the assessee is rejected. 5. In the result, the appeal filed by the assessee in is dismissed. Order pronounced on Monday, the 13th day of April, 2015, at Chennai.