Decided on June 30,2014

Mahor Vaish (Mahajan) Sewa Sansthan Appellant


Pramod Kumar, Member (A) - (1.) THIS appeal is directed against the order dated 30th April 2014, passed by learned Commissioner of Income Tax -II Agra, declining grant of approval for the purposes of Section 80G of the Income Tax Act, 1961.
(2.) THE application was declined by the learned Commissioner on the short ground that since the assessee institution has spent Rs. 49,54,000, for purchase of land and construction of a community hall, the use of such a community hall for commercial purposes cannot be ruled out. Learned Commissioner has also observed that only an amount of Rs. 10,240 has been shown to have been spent on "orphanage expenses" and the assessee has not produced any evidence of any significant charitable activity. With these observations, having noted that almost entire funds have been used towards construction of 'community hall' and that the applicant does not fulfil conditions laid down in clause (i) to (v) of sub section (5) of Section 80G, learned Commissioner rejected the application. The assessee is aggrieved of the stand of the learned Commissioner, and is in appeal before us. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case in the light of the applicable legal position.
(3.) WE find that that the requirement for grant of approval is set out under rule 11 AA of the Income Tax Rules which provides as follows: Requirements for approval of an institution or fund under section 80G. (1) The application for approval of any institution or fund under clause (vi) of sub -section (5) of section 80G shall be in Form No. 10G and shall be made in triplicate. (2) The application shall be accompanied by the following documents, namely: (i) Copy of registration granted under section 12A or copy of notification issued under section 10(23) or 10(23C); (ii) Notes on activities of institution or fund since its inception or during the last three years, whichever is less; (iii) Copies of accounts of the institution or fund since its inception or during the last three years, whichever is less. (3) The Commissioner may call for such further documents or information from the institution or fund or cause such inquiries to be made as he may deem necessary in order to satisfy himself about the genuineness of the activities of such institution or fund. (4) Where the Commissioner is satisfied that all the conditions laid down in clauses (i) to (v) of sub -section (5) of section 80G are fulfilled by the institution or fund, he shall record such satisfaction in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid. (5) Where the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub -section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing: Provided that no order of rejection of an application shall be passed without giving the institution or fund an opportunity of being heard. (6) The time -limit, within which the Commissioner shall pass an order either granting the approval or rejecting the application shall not exceed six months from the date on which such application was made: Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub -rule (3) shall be excluded.;

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