Sri Kalluri Lakshmi Vara Prasada Rao ... vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH 'B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI P.M.JAGTAP, ACCOUNTANT MEMBER ITA No.597/Hyd/2013 : Assessment year 2010-11

Sri Kalluri Lakshmi Vara Prasada V/s. Director of Income-tax Rao Memorial Charitable Trust, (Exemption), Hyderabad Hyderabad

(PAN - AAITS 0009 D)

(Appellant) (Respondent)

Appellant by : Shri A.V.Raghuram

Respondent by : Shri D.Sudhakar Rao CIT-DR

Date of Hearing 27.4.2015 Date of Pronouncement 29.4.2015

ORDER

Per G.C.Gupta, Vice President:

This appeal by the assessee is directed against the order of the Director of Income-tax(Exemption) dated 27.2.2013 rejecting the application of the assessee for grant of approval under S.80G of the Income Tax Act,1961.

2. Grounds of appeal of the assessee are as under-

"1. On the facts and in the circumstances of the case, the order of the learned Director of Income-tax(Exemption) is perverse, illegal and unsustainable in law.

2. The learned Director of Income-tax(Exemption) erred in holding that the amendment to the Trust Deed of the Appellant is not a valid documents for the reason that for the amendment there is no date on which it is made. The DITE failed to appreciate that the trust is created by a valid Trust Deed, duly registered with appropriate authority and mere non-mentioning of amendment does not make it invalid as long as 2 ITA No.597/Hyd/2013 Sri Kalluri Lakshmi Vara Prasada Rao Memorial Charitable Trust, Hyderabad such an amendment is not fatal to granting of registration and thereby erred in refusing to grant approval u/s. 80G(5)(vi).

3. The learned Director of Income-tax(Exemption) erred in refusing to grant approval U/s. 80-G on the ground of non-production of vouchers holding that the trust has not correctly maintained regular account of all its expenditure which is relevant only for assessment and not for approval and thereby erred in holding that the assessee does not fulfill the condition stipulated in clause (vi) of Sec.80G(5) in spite of producing the accounts maintained regularly."

3. The learned counsel or the assessee submitted that it is second round of litigation before the Tribunal. In the first round of litigation, the Director of Income-tax(Exemption) rejected the application of the assessee under S.80-G on the ground that the original trust deed was not produced before him. He submitted that the Tribunal vide order dated 24.3.2010 has restored the issue of approval under S.80G to the file of the Director of Income- tax(Exemption) for fresh adjudication after re-examination of the same in accordance with law. The Director of Income- tax(Exemption) vide his impugned order dated 27.2.2013 has again rejected the application of the assessee for approval under S.80G on the ground that the assessee has executed an amended deed of trust, wherein no date was mentioned and the stamp paper of the said document was purchased on 15.4.2009 much after the original deed of trust made on 5.11.2008. The second ground of Director of Income-tax(Exemption) for rejecting the approval under S.80G was that there were no bills and vouchers for the accounting year 2009-10, although the assessee has claimed a sum of Rs.5,000 towards donation. He relied on the decision of Hon'ble Andhra Pradesh High Court in the case of New Noble Educational Society and Others V/s. CCIT (334 ITR 303).

3 ITA No.597/Hyd/2013 Sri Kalluri Lakshmi Vara Prasada Rao Memorial Charitable Trust, Hyderabad

4. The Learned Departmental Representative, on the other hand, has relied on the order of the Director of Income- tax(Exemption). He submitted that the assessee was not maintaining the books of account and its expense are not vouched. He referred to the relevant portion of the order of the Director of Income-tax(Exemption) in support of the case of the Revenue.

5. We have considered the rival submissions and have perused the order of the Director of Income-tax(Exemption). We find that there seems to be no valid reason for not granting the approval under S.80G of the Act to the assessee trust. The assessee has already been granted registration under S.12AA of the Act by the Director of Income-tax(Exemption) vide order dated 17.4.2009., It is not the case of the Revenue that the objects of the assessee were not charitable in nature. The assessee has produced the original trust deed before the Director of Income- tax(Exemption). Copy of the amended trust deed has been filed in the compilation before the Tribunal. We find that the date of amendment to the trust deed is not decisive to the issue of the grant of approval under s.80-G of the Act. With regard to the other objection of the Revenue that the assessee could not produce the vouchers for the expenses of Rs.5,000 spent during the financial year 2009-10, we find that the assessee has claimed to have made a donation of Rs.5,000 during the relevant period. Even if the assessee could not produce the voucher for such donation, that can be considered while framing the assessment for the relevant year by the Assessing Officer and is not a relevant consideration, while deciding the issue of grant of approval under S.80G of the Act to the assessee trust. No other condition material for the grant of approval under S.80G could be shown by the Revenue as not fulfilled by the assessee. In these facts of the case, we are of the view that the assessee trust was entitled to approval under S.80G 4 ITA No.597/Hyd/2013 Sri Kalluri Lakshmi Vara Prasada Rao Memorial Charitable Trust, Hyderabad of the Act, and the same is accordingly granted to the assessee. Grounds of appeal of the assessee are allowed.

6. In the result, appeal of the assessee is allowed.

Order pronounced in the court on 29th April, 2015

Sd/- Sd/-

(P.M.Jagtap) (G.C.Gupta) Accountant Member Vice President

Dt/- 29th April, 2015

Copy forwarded to:

1. Sri Kalluri Lakshmi Vara Prasada Rao Memorial Charitable Trust, C/o. M/s. K.Vasant Kumar & A.V.Raghuram, Advocates, 610 Babukhan Estates, Basheerbagh, Hyderabad 500 001.

2. Director of Income-tax(Exemption), Hyderabad

3. Asst. Director of Income-tax(Exemption) II, Hyderabad

4. Departmental Representative, ITAT, Hyderabad.

B.V.S