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| The Tax Publishers2020 TaxPub(DT) 0616 (Chd-Trib) : (2020) 077 ITR (Trib) 0296 INCOME TAX ACT, 1961
Section 80G
Where assessee-company was denied approval under section 80G only on the ground that it was formed to carry out the corporate social responsibility of another company, however, there was no averment or allegation that the assessee did not fulfill the conditions as required under section 80G(5), the CIT(E) was not justified in denying the approval under section 80G and accordingly, he was directed to grant such approval to the assessee.
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Deduction under section 80G - Charitable trust - Allowability - Trust being formed by a company for complying with corporate social responsibility requirements
Assessee-company was registered as a charitable institution under section 12A. It filed an application for seeking approval under section 80G. However, CIT (E) denied such approval observing that the assessee was not established for charitable purposes, as it was a corporate social responsibility (CSR) arm of another company 'E' and that the major source of income of the assessee was donations from 'E'. He further observed that the registration under section 12A was not sufficient condition for claiming approval under section 80G(5), even though it was an essential condition and accordingly, denied the approval. Held: Assessee admittedly, was granted registration under section 12A and the said registration was subsisting and was not cancelled. Further, a perusal of the impugned order of CIT(A) showed that he had not doubted the charitable object and activities of the assessee. The only contention was raised that the assessee-company was formed to carry out the corporate social responsibility of another company. However, there was no averment or allegation that the assessee did not fulfill the conditions as required under section 80G(5). Further, Tribunal in case of Nanak Chand Jain Charitable Trust v. CIT (Exemptions) (2018) 91 taxmann.com 197 (Del-ITAT): 2018 TaxPub(DT) 1387 (Del-Trib) dt. 9-2-2018 held that merely because assessee-trust/company has been formed by another company for complying with the corporate social responsibility requirements, it cannot be denied registration under section 12AA unless the genuineness of the activities of assessee-trust or its charitable objects is doubtful. Accordingly, the order of the CIT(E) was set aside and he was directed to grant the approval under section 80G(5) to the assessee.
REFERRED : Roundglass Foundation v. CIT (Exemptions) (2020) 77 ITR (Trib) 288 (Chd) Escorts Skill Development v. CIT (Exemptions) ITA Nos. 527 and 528/Delhi/2017 vide Order, dt. 26-4-2019: 2019 TaxPub(DT) 3519 (Del-Trib) Nanak Chand Jain Charitable Trust v. CIT (Exemptions) (2018) 91 taxmann.com 197 (Del-ITAT): 2018 TaxPub(DT) 1387 (Del-Trib)
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, CHANDIGARH BENCH
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