Raghu Nath Rai Memorial Educational & Charitable Trust Vs CIT(E) (ITAT Chandigarh)
We do not find the rejection of application for grant of approval u/s 80G in the present case by the Ld.CIT(E), solely for the reason that the assessee society has sufficient disposable funds available with it and no reason was given for seeking funds by way of donation, as appropriate. The provisions of section 80G(5) of the Act as reproduced above are very clear, setting out conditions which are to be complied with for the purpose of being eligible for approval u/s 80G of the Act. The sufficiency of funds available with an institution seeking the approval is no where mentioned as condition to be looked into before granting approval.
The Ld.CIT(E) has not given any cognizance to the above facts and has in fact not examined the ligibility of the assessee to grant of approval vis a vis the conditions set out in section 80G(5) of the Act,at all. We, therefore, consider it fit to restore the issue back to the Ld.CIT(E) to reconsider the application for grant of approval strictly in the light of the conditions set out in section 80G(5) of the Act and thereafter pass an order in accordance with law. We may add that the assessee be given due opportunity of hearing in this regard.
FULL TEXT OF THE ITAT JUDGMENT
This appeal has been preferred by the assessee against the order of Ld. Commissioner of Income Tax(Exemptions), Chandigarh (hereinafter referred to as (‘Ld.CIT(E)’ dated 28.3.2017 rejecting the assessee’s application for approval u/s 80G of the Income Tax Act, 1961 (in short ‘the Act’).
2. Briefly stated, an application in Form No.10G has been filed by the assessee society on 26.9.2016 for approval u/s 80G of the Act, to seek donations eligible for deduction under the said section. The assessee society was registered under the Societies Registration Act XXI on 29.9.2003 and was also registered u/s 12AA of the Act vide CIT-II, Chandigarh’s order dated 19.5.2004 and had also been granted approval u/s 10(23C(vi) of the Act vide order dated 21.8.2007.
3. During the course of hearing before the Ld.CIT(E) in the present proceedings, due opportunity of hearing was granted to the assessee, calling for information by issuing show cause letter to it. Due reply was filed by the assessee in response to the said letter, after considering which the Ld.CIT(E) rejected the application holding that the assessee had at its disposal investible surpluses and the rationale for seeking donations was not brought out in the present case and further that the activities and claim of the assessee society of imparting education was not corroborated by its emphasis on assets creation and other investments till date. The relevant findings of the Ld.CIT(E) at paras 4 to 7 of its order are as under:
“4. The applicant society has submitted its financial statements for last four years. The Gross receipt, Net surplus, FDRs as per balance sheet and additions made under the head “building” are as under:-
