INCOME TAX ACT, 1961

Section 80G (5)(vi)

Deduction under section 80G(5) - Approval under section 80G(5)(vi) - Whether approval could be denied on the ground that no significant activity had been started by assessee-trust as per its objects -

Assessee-charitable trust was granted registration under section 12AA (1)(b) but the approval under section 80G(5)(vi) was denied by CIT(E) on the ground that no significant activity had been started by the assessee trust as per the objects. Assessee contended that if the CIT (E) had not found any violation of provision of section 80G(5), then the approval could not be denied solely on the ground that it had not carried out any activity. Further, assessee had also stated at bar that it had already started its activity as per the objects and, therefore, approval under section 80G(5) should be granted. Held: Since assessee applied for registration under section 12AA as well as approval under section 80G(5) on the same date, therefore, there was no new development to be verified by the CIT (E) after grant of registration under section 12AA for the purpose of granting approval under section 80G(5). Moreover, once the objects of the assessee trust was found to be charitable then non-start of the activity by the assessee trust could not be a reason for denial of approval under section 80G(5) when on the basis of same set of facts, the registration under section 12AA was granted by the CIT(E). Thus, as no adverse fact was found against the assessee and as assessee had claimed to have already started the activity, the matter was required to be considered afresh by the CIT (E) after verification of the activities carried out by the assessee. Hence, the matter was remanded back to the CIT (E).

Distinguished:Mattapali Chalmayya Charitable Trust v. CIT (E) [IT Appeal no. 234 (Vizag) of 2017, dt. 6-12-2017], Kirti Chand Tarawati Ch. Trust v. DIT (1998) 232 ITR 11 (Delhi) : 1998 TaxPub(DT) 1271 (Del-HC)

REFERRED : Keshar Devi Godara Samajik Kalyan Sansthan Singor v. CIT (Exemption) [IT Appeal No. 877 (JP) of 2016, dated 11-1-2017],Chandrawati Devi Foundation Trust v. CIT (Exemption) (2015) 155 ITD 1074 (Luck.-Trib.)

FAVOUR : In assessee's favour

A.Y. : 2014-15

SUBSCRIBE FOR FULL CONTENT