Govats Foundation , Hyd, Hyderabad vs Assessee

GOVATS Foundation, V/s. Income Tax Officer (Exemption) Hyderabad Ward-1, Hyderabad

(PAN - AABAG 6870 G)

(Appellant) (Respondent)

Appellant by : Shri Ramdev Bhutada

Respondent by : Shri D.Sudhakar Rao DR

Date of Hearing 10.6.2015 Date of Pronouncement 12.6.2015

ORDER

Per P.M.Jagtap, Accountant Member :

This appeal filed by the assessee is directed against order of the learned Commissioner of Income-tax (Exemptions), Hyderabad dated 29.1.2015, whereby he refused to grant approval under S.80G(5) of the Act to the assessee by rejecting its application filed in Form No.10G.

2. The assessee in the present case is a society which is formed with an object to serve holy cows and create awareness among society and farming community about importance of cows. Registration under S.12A was granted to it by the learned Commissioner of Income-tax(Exemption) Hyderabad vide his order dated 27.3.2014 passed under S.12AA of the Act. Thereafter, the assessee society filed an application in Form No.10-G on 28.7.2014, seeking approval under S.80G(5)(vi) of the Act. When the assessee was called upon by the learned Commissioner- (Exemptions) to explain the nature of its activities, it was submitted 2 ITA No.324/Hyd/2015 GOVATS Foundation, Hyderabad

that since the inception of the assessee society, feeding assistance was being provided every day to the cows maintained by Goshalas in the twin cities. It was also submitted that more than 1,000 collection boxes were installed at various business places in twin cities and the amounts received through these several boxes were being deposited into bank accounts and cheques were regularly issued to the suppliers of grass and kutti on monthly basis. Monthwise details of such collections were also furnished by the assessee before the learned Commissioner (Exemptions). When it was pointed out by the learned Commissioner(Exemptions) to the assessee that these collections, being in the nature of anonymous donations, are not eligible for exemption under S.11, by virtue of the provisions of S.115BBC, and the condition stipulated in clause (1) of sub-section (5) of S.80G, itself was not satisfied, it was inter alia submitted on behalf of the assessee society that the collection boxes were kept in control of particular individuals, and therefore, the donors were clearly identifiable. It was also submitted that the entire receipts of the assessee's society were not from such collection boxes, but there were also donations received from public by cheques.

3. The learned Commissioner(Exemptions) did not find the explanation of the assessee society to be acceptable. According to him, entire collection received by the assessee society through collection boxes being in the nature of anonymous donations, was not eligible for exemption under S.11, by virtue of S.115BBC of the Act, and therefore, the condition stipulated in clause (i) of sub- section (5) of S.80G was not fulfilled in the case of the assessee. He therefore, rejected the application filed by the assessee in Form- 10G and refused the approval sought by the assessee society under S.80G(5) of the Act. Aggrieved by the order of the learned 3 ITA No.324/Hyd/2015 GOVATS Foundation, Hyderabad

Commissioner(Exemptions), assessee has preferred this appeal before the Tribunal.

4. We have heard the arguments of both the sides and also perused the relevant material on record. The Learned Departmental Representative has strongly relied on the impugned order of the learned Commissioner(Exemptions) in support of the Revenue's case that the condition stipulated in clause (i) of Sub- section (5) of S.80G having not been satisfied in the case of the assessee, the approval sought by it under S.80G was rightly denied. The learned counsel for the assessee, on the other hand, has raised various contentions in support of the assessee's case for grant of approval under S.80G(5) of the Act. One of the contentions raised by him is that the assessee society having been granted registration under S.12A by the learned Commissioner(Exemptions) and the said registration having not been withdrawn even till date, approval under S.80G(5) could not be denied to the assessee society. In support of this contention, he has relied on the decision of the Delhi Bench of this Tribunal in the case of Maharshi Dayanand Education Society, New Delhi V/s. CIT (ITA No.218/Deld/2009 dated 24.2.2011), wherein certificate granted to the assessee under S.12A treating it as a charitable institution was subsisting and was not shown to have been withdrawn till the date of the order of the Tribunal, and in these facts and circumstances of that case, it was held by the Tribunal that renewal of approval under S.80G(5) could not be denied to the assessee. This similar view has been reiterated by the Delhi Bench of the Tribunal in the case of Late Siv Shankar Memorial Education Society V/s.CIT (ITA No.4698/Del/2009 dated 16.3.2012), wherein it was held that the registration of a charitable trust or society under S.12A of the Act is not an idle or empty formality and where the registration under S.12A is granted, the grant of benefit of approval under S.80G 4 ITA No.324/Hyd/2015 GOVATS Foundation, Hyderabad

cannot be denied especially when the facts and circumstances remained the same. It was held that when the registration to the assessee as a charitable society was subsisting and there was no material that had been placed to show that such registration had been withdrawn or was intended to be withdrawn, renewal of approval under S.80G(5) could not be denied to the assessee. In our opinion, the ratio of these two decisions of the coordinate benches of this Tribunal is squarely applicable to the present case, wherein registration under S.12A has been granted to the assessee society and there is nothing brought on record to show that the same has been or is intended to be withdrawn. The learned CIT-DR has also not been able to dispute or controvert this position. We, therefore, respectfully follow the decision of the coordinate benches of this Tribunal in the cases of Maharshi Dayanand Education Society, New Delhi V/s. CIT (supra) and Late Siv Shankar Memorial Education Society V/s.CIT (supra) and direct that the approval under S.80G(5) be granted to the assessee society.

5. In the result, appeal filed by the assessee is allowed

Pronounced in the court on 12th June, 2015

Sd/- Sd/-

(Saktijit Dey) (P.M.Jagtap) Judicial Member Accountant Member

Dt/- 12th June, 2015

Copy forwarded to:

1. GOVATS Foundation 5-3-989, 2nd Floor, 210, Sherza Estates, N.S.Road, Hyderabad 95.

2. Income Tax Officer (Exemption) Ward-I, Hyderabad

3. Commissioner of Income-tax(Exemption) Hyderabad

4. Departmental Representative, ITAT, Hyderabad.

B.V.S