- (1.) The Revenue is in appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') against the order passed by the Income Tax Tribunal, Delhi Bench 'G', New Delhi in ITA No.4440/Del/2009 dated 30.04.2010.The Revenue has sought the following substantial questions of law: (i) Whether on facts and in circumstances of the case, the Hon'ble ITAT was justified in law in directing the CIT to allow approval under Section 80G(5)(vi) of the Income Tax Act, when income derived by the applicant trust was includible in its total income as per the provisions of the clause (i) of sub-section (5) of Section 80G of the Income Tax Act & where expenditure with reference to sub-section (5B) read with explanation 3 of Section 80G of the Income Tax Act exceeded 5% of the total income of the assessee trust? (ii) Whether on facts and in circumstances of the case, the Hon'ble ITAT was justified in law in directing the CIT to allow approval under Section 80G(5)(vi) of the Income Tax Act, when income derived by the applicant trust was includible in its total income as per the provisions of the clause (i) of sub-section (5) of Section 80G of the Income Tax Act & where expenditure with reference to sub-section (5B) read with explanation 3 of Section 80G of the Income Tax Act exceeded 5% of the total income of the assessee trust?
(2.) The assessee-Trust was constituted on 14.10.1996 and was registered under Section 12A of the Act on 20.01.1987. The assessee-Trust was given registration under Section 80G of the Act as well. The last renewal was on 26.05.2006 for the period from 01.04.2004 to 31.03.2009. The assessee-Trust sought renewal of registration under Section 80G(5) of the Act. The subsequent request for renewal of registration was declined by the Commissioner of Income-Tax inter-alia for the reason that the Trust has incurred an expense of Rs.2,40,167/-on Mandir Pooja, which exceeds 5% of the total income of the Trust permissible for religious activities. In appeal, the learned Tribunal returned a finding that the amount incurred on Mandir Pooja - a religious activity is 4.93%, it being Rs.2,40,167/-out of the total income of Rs.48,68,989/-, therefore, the Trust is entitled to registration.
(3.) Learned counsel for the appellant on the basis of Circular No. 5P (LXX-6) issued by the Central Board of Direct Taxes dated 19.06.1968 and a judgment of Madras High Court reported as Commissioner of Income-Tax, Tamil Nadu-I Vs. Rao Bahadur Calavala Cunnan Chetty Charities,135 ITR 485 has vehemently argued that Section 11 of the Act does not deal with total income, it deals with income and, therefore, the expenditure on religious activity has to be seen after allowing the expenditure and not on the total income.;