Case Law Details
RELEVANT PARAGRAPH
10.3 Now reverting to the facts of the instant case, as analysed in the preceding paragraph of the order, the significant fact which need out attention are that the appellant-institute was granted registration under section 12A on 9th October. 1996. The institute has also granted approval under section 80G on 2nd April, 1997 for the period 17-8-1996 to 31-3-1999 on the basis of which the institution must have received the enormous amount of donations which the institute was supposed to incur to the achieve the main object of the society. Now the present application for approval u/s 80G of the Act has been moved on 29-12-2008 i.e. after a period of over 9 years. From the objects of the society, it appears that the main object of the society, as come out from the trust deed, was to establish schools and colleges, which would be open to students of all communities for education. From the ratio of the decision (supra), it is clear that the Commissioner before granting approval u/s 80G is empowered to satisfy himself about the fact that the activities of the applicant are genuine and in consonance with the objects of the trust. In other words, if establishing and running of a school/college is the main object of the society; the Commissioner has to satisfy himself whether, the society during this period of 12 years has established the school/ college, where the education Is being Imparted and the factum of establishment and running of school/college is a genuine activity carried out by the society; ff the appellant society fails In “establishing before the Commissioner that it has constructed the school/ college and if imparting education to students, then the Commissioner is well within his powers to refuse the grant of approval to the appellant society by recording a finding that the society failed in establishing that It has constructed of school/ college and it is imparting education and consequently, facted to satisfy about the genuineness of the activities of the appellant society/ Institution .
10.4 In the instant case, undisputedly, the institution was granted registration u/s 12A on 9th Oct, 1996 but except procuring land for a sum of Rs. 13,13,721 out of the corpus funds/ donation of Rs. 52,36,000 the appellant has not even started the construction activity of the building of school/ college where it could impart education to students to achieve the main object of the society. It appears that during this entire period till date the society’s main object was to muster as much donation towards corpus as it could, totally ignoring the responsibility of taking any steps towards achieving its main object of constructing school/ college for imparting education. On the contrary, on examining the income and expenditure statement of the society placed on record of the Tribunal we find that in the-years ending 31.3.2006, 31.3.2007 and 31.3.2008. The society has merely income an expenditure of Rs. 9613, Rs. 8301 anc|Rs. 11,720 respectively on office maintenance, printing and stationery, travelling and conveyance etc. but has not spent a single penny for achieving its goal of constructing school/ college for imparting education to students.
11. From the above facts, it is clear that Once the society during a period of almost 12 years has not carried out any activity, except purchasing land, to construct school/ college building for imparting education, which was the main object of the society the activities of the trust for granting approval under section 80G cannot be called genuine and the CIT was fully justified in refusing to grant approval u/s 80G of the Income-tax Act. Hence, the order of Commissioner of Income Tax is upheld and consequently the remaining grounds of appeal taken by the appellant society stand rejected.
