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Case Law Details

Case Name : Seth Paannalalji Vs CIT (ITAT Indore)
Appeal Number : ITA No. 363/Ind/2022
Date of Judgement/Order : 08/05/2023
Related Assessment Year :
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Seth Paannalalji Vs CIT (ITAT Indore)

ITAT Indore held that registration under section 80G duly granted as giving donations to other trusts and societies to enable those trust and societies undertake their charitable activities is also one of the way of carrying out charitable activity.

Facts- The assessee is a Trust created on 08.2001. It is registered under the M.P. Public Trust Act. It was also registered by Income-tax Department u/s 12A as well as section 80G of Income-tax Act, 1961, w.e.f. 10.0 1.2003. However, in terms of the amendments made in Income-tax Act, 1961, it is required to obtain re-registration u/s 12A as well as 80G. Therefore, to comply with such requirements, the assessee filed two separate applications for registration u/s 12A as well as 80G. Acting on such applications, the registration u/s 12A was duly granted w.e.f. 24.09.2021, but, however, the registration u/s 80G has been denied through order dated 20.09.2022. Aggrieved, the assessee has filed this appeal and now before us.

Conclusion- Held that there are two ways of carrying out activities, one directly by spending moneys on activities and other by giving donations to other trusts/societies to enable them undertake charitable activities and it is for the assessee to decide which method or methods to be adopted so long the method adopted by assessee is neither illegal nor prohibited by statute.

Needless to mention that the donations given to other trusts/societies is treated as a valid application of income for the purpose of giving exemption u/s 11(1) (a) and the department has accepted this in assessee’s own case year after year.

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July 2024