The Pune bench of Earnings Tax Appellate Tribunal (ITAT) presided over by R.S. Syal, Vice President and Accountant Member with Partha Sarathi Chaudhury, Judicial Member held that the assessee-trust is allowed to get exemption underneath the Part 80G of the Earnings Tax Act, 1961.

Aggrieved by the order of the Commissioner of Earnings Tax (Exemption)[(CIT(E)], the enchantment was most popular by the assessee earlier than the appellate tribunal.

The assessee-trust, which engaged in philanthropic actions, sought the grant underneath Part 80G of the Earnings Tax Act, which allows a deduction for donations made to particular funds, charitable establishments, and so on.; nonetheless, the CIT(E) denied the declare.

The CIT(E) requested the assessee to submit the furnished data relating to the actions taken to make use of the belief’s receipts for its charitable functions, and the assessee’s counsel did so.

Moreover, the assessee submitted an utility for approval underneath Part 80(5)(vi) of the Earnings Tax Act, outlining its involvement in charity and social welfare initiatives.

The assessee acquired donations price Rs.13,50,00,000 from Shri Ganapati Devasthan Belief, which have been meant to be utilised, amongst different issues, for the constructing and administration of the Gajanan Maharaj temple, based on the CIT(E).

Nonetheless, the event and maintenance of the temple are actually not addressed by the assessee belief’s objects, and as a consequence, the assessee has not carried out its actions in accordance with its objects.

Moreover famous that the assessee failed to supply proof of the sincerity of their charity exercise and didn’t meet the standards established by Part 80G(5) of the Earnings Tax Act.

Hari Krishnan, the assessee’s counsel referenced the rulings of the Supreme Court docket instances Surat Metropolis Gymkhana (2008) and Gemological Institute of India (2019) to ascertain that when a belief has been registered underneath part 12AA of the Earnings Tax Act, its authorisation underneath part 80G of the Earnings Tax Act can’t be denied.

The consultant added that the contributions from the Shri Ganapati Devasthan Belief have been utilized in compliance with the Joint Charity Commissioner’s orders. He added that only a small portion of the funds was used for the acquisition of land and the residue was donated.

The counsel of the Division Sardar Singh Meena supported the choice of CIT(E).

The bench concluded its evaluation of each side by observing that it’s settled legislation that the query of whether or not the assessee-trust is for charity functions or not itself doesn’t come up as soon as registration has been given to a charitable belief underneath Part 12AA of the Earnings Tax Act.

Moreover, it was decided that the assessee solely meant to construct the temple and that, till this level, they’d solely engaged in charity actions, to which the Division had not objected.

The bench dominated that the division had not offered ample proof to help the belief’s spiritual nature. If the belief engaged in spiritual actions, it isn’t topic to the provisions of part 80G of the Earnings Tax Act. As a response, the tribunal directed the CIT(E)’s to grant the exemption underneath Part 80G of the Earnings Tax Act.

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Santshreshtha Gajajan Maharaj Sevabhavi Sanstha vs Commissioner of Earnings-tax

Counsel for Appellant:   Shri Hari Krishan

Counsel for Respondent:   Shri Sardar Singh Meena

CITATION:   2022 TAXSCAN (ITAT) 1837