Iapl/208/2011 Of Commissioner Of Income Tax Ghaziabad v. Babbar Charitable Trust A-5 New Gandhi Nagar Ghaziabad

Court No. - 35 Case :- INCOME TAX APPEAL No. - 208 of 2011 Appellant :- Commissioner Of Income Tax, GhaziabadRespondent :- Babbar Charitable Trust A-5, New Gandhi Nagar GhaziabadCounsel for Appellant :- S.S.C. I.T.,Shubhm AgarwalCounsel for Respondent :- Suyash Agarwal,R.R. Agrawal,S. Agarwal Hon'ble Bharati Sapru,J.Hon'ble Neeraj Tiwari,J. Heard Shri Shubham, learned counsel for theappellant and Shri Suyash Agrawal, learnedcounsel for the respondent. This appeal under Section 260-A of the IncomeTax, 1961(hereinafter referred to as the 'Act') hasbeen filed by the department against the order ofthe Income Tax Appellate Tribunal dated27.12.2010 in a matter arising out of the grant ofrelief to the assessee under Section 80 G of theIncome Tax Act. The questions of law sought tobe answered as as hereunder: "(1) Whether the ITAT has erred in law and on facts in directing to grant80G and did not appreciate the fact that the assessee could not prove thegenuiness of charitable activity? (II) Whether the ITAT has erred in law and on facts by not appreciatingthe fact vis-a-vis provision of section 12AA(1)(a) which clearly speaksabout the satisfaction of the CIT in respect of charitable activity beingcarried out? (iii) Whether the ITAT was justified in granting the benefit fo 80G to theassessee even when there is a clear cut finding that the trust does notexists at the given address?" An admitted fact is that the assessee wasregistered under Section 12-A of the Act on05.03.1992 and since then its registration hasnever been cancelled. However, the CIT rejectedthe application of the assessee for approval underSection 80G of the Act by recording observationsthat there was no proof of the activities beingcarried on by the assessee and even though anopportunity was given by the CIT to the assesseeto substantiate it, they did not come forward to " Learned counsel for the department has sought toargue that Rules 11-AA provides as hereunder: "11AA . (1) The application for approval of any institution or fund underclause (vi) of sub-section (5) of section 80G shall be in Form No. 10G andshall be made in triplicate. (2) The application shall be accompanied by the following documents,namely :— Copy of registration granted under section 12A or copy of notificaunder section 10(23) or 10(23C) ; Notes on activities of institution or fund since its inception or durithree years, whichever is less ; Copies of accounts of the institution or fund since its inception or durthree years, whichever is less. (3) The Commissioner may call for such further documents or informationfrom the institution or fund or cause such inquiries to be made as he maydeem necessary in order to satisfy himself about the genuineness of theactivities of such institution or fund. (4) Where the Commissioner is satisfied that all the conditions laid downin clauses (i) to (v) of sub-section (5) of section 80G are fulfilled by theinstitution or fund, he shall record such satisfaction in writing and grantapproval to the institution or fund specifying the assessment year or yearsfor which the approval is valid. (5) Where the Commissioner is satisfied that one or more of the conditionslaid down in clauses (i) to (v) of sub-section (5) of section 80G are notfulfilled, he shall reject the application for approval, after recording thereasons for such rejection in writing : Provided that no order of rejection of an application shall be passedwithout giving the institution or fund an opportunity of being heard. (6) The time limit within which the Commissioner shall pass an ordereither granting the approval or rejecting the application shall not exceedsix months from the [end of the month in] which such application wasmade : Provided that in computing the period of six months, any time taken by theapplicant in not complying with the directions of the Commissioner undersub-rule (3) shall be excluded.]" (5) Where the Commissioner is satisfied that one or more of the conditionslaid down in clauses (i) to (v) of sub-section (5) of section 80G are notfulfilled, he shall reject the application for approval, after recording thereasons for such rejection in writing : Provided that no order of rejection of an application shall be passedwithout giving the institution or fund an opportunity of being heard. (6) The time limit within which the Commissioner shall pass an ordereither granting the approval or rejecting the application shall not exceedsix months from the [end of the month in] which such application wasmade : Provided that in computing the period of six months, any time taken by theapplicant in not complying with the directions of the Commissioner undersub-rule (3) shall be excluded.]" Therefore, while examining the application underSection 80G(5) of the Act it was open to the CITto go into the genuineness of the activities being Against the order passed by the CIT the assesseewent in appeal before the Tribunal and theTribunal while examining the matter has recordedfindings to the contrary that approval underSection 80G was renewed for the period01.04.2001 to 31.03.2003. He also records thatthe application under Section 80G wasaccompanied by income and expenditure accountfor financial years 2006-07, 2007-08 and 2008-09and the accounts reflected that the assessee hadbeen carrying on charitable activities by way ofproviding food to the poor, medical aid andblankets and clothes to them. It also recorded thatthe trust had been registered under Section 12Aand the registration has not been withdrawn tilldate. The Tribunal, therefore, recorded that thecondition regarding approval of the trust underSection 80G(5) of the Act are satisfied. The Tribunal while examining the matter has alsogone into the question as to whether theCommissioner while examining the genuinenessof the activities of the assessee had mentioned asto what details were required and had not beenfiled i.e. to say most specific dissatisfaction wasrecorded. On the other hand the assessee hadnecessarily satisfied the condition for the grant ofa certificate under Section 12A of the Act whichrequire that the objects of the society which seeksto be declared as a charitable had to satisfy thatthe aim and objects are charitable in nature andsecondly that the activities are genuine. The Tribunal, therefore, taking into account thatfor at least three years details have been providedto show that the charitable activities were being carried on and also in view of the fact that theregistration under Section 12-A of the Actcontinued in favour of the assessee, the orderpassed by the Commissioner was not justified. In view of this, we uphold the decision of the Tribunal and the questions of law are answered infavour of the assessee and against the department. The writ petition is accordingly dismissed. Order Date :- 20.2.2018pks