AI Insights
Nimaaya Welfare Foundation appealed against the decision of the Commissioner of Income Tax (Exemptions), Ahmedabad, which had rejected their application for registration under Section 80G of the Income Tax Act, 1961. The rejection was primarily based on the incorrect indication of 'religious' as one of the objects in their application form, which was a clerical error. The foundation argued that their activities are entirely charitable, focusing on medical care and social upliftment, without any religious intent. The Tribunal acknowledged the error and the foundation's charitable activities, directing a re-evaluation of their application.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 302092 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 30 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-06-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
27-06-2023
Assessment Year
misc
Appeal Filed On
28-03-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 219/SRT/2023 (AY: 2023-24) (Hearing in Physical Court) Nimaaya Welfare Foundation, FP-600/A TPS-5, Plot 1 &2, Paiky 3-5 Floor Navchetan Society, Gopipura, S.O. Majura, Surat, Gujarat-395001. PAN: AAHCN 5406 H Vs. C.I.T.(Exemptions), Ahmedabad. APPELLANT RESPONDEDNT Assessee by Shri Darshit J Naik, CA Department by Shri Ashok B. Koli, CIT-DR Date of Institution of Appeal 29/03/2023 Date of hearing 28/06/2023 Date of pronouncement 28/06/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Exemptions), Ahmedabad [in short the ld. CIT(E)] dated 23/03/2023 in rejecting application for registration under Section 80G of the Income Tax Act, 1961 (in short, the Act). The assessee has raised following grounds of appeal:- “1. The learned Commissioner of Income Tax erred in rejecting the application for registration under Section 80G made by the Appellant. 2. The learned Commissioner of Income Tax erred in misinterpreting and misreading the clause of the Memorandum of Association. 3. The learned Commissioner of Income Tax erred in not granting adequate opportunity to the appellant to meet its case. 4. The learned Commissioner of Income Tax erred in ignoring the fact that the appellant: (a) Had been granted a Section 8 license ITA No. 219/SRT/2023 Nimaaya Welfare Foundation Vs CIT(E) 2 (b) Had been granted a provisional registration by the Commissioner of Income Tax’s Predecessor. 5. Having regard to the facts and circumstances of the case and the provisions of law, the appellant submits the Commissioner of Income Tax be directed to grant the Certificate u/s 80G to the appellant.” 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised representative (ld.AR) of the assessee submits that the assessee is a company registered under Section 8 of the Companies Act, 2013. The assessee is having registration under Section 12AA of the Act. The assessee was set up/established for charitable activities with the object to aid, help and provide medical care to couples suffering from infertility, to set up hospitals, clinics or healthcare centres for women related diseases, to hold educational event, conferences, workshops, to organise check-up camps, awareness programme by way of various mediums and to work and engage with government and government bodies for social and economic upliftment of women. The details of memorandum of association with its object is filed on record. The ld. AR of the assessee further submits that while filing online application for registration under Section 80G of the Act, the officials in his office has wrongly ticked (√) the option as ‘religious’. The ld. AR of the assessee invited our attention on acknowledgment of Form 10AB (As per Rule 17A/11AA/2C) wherein in Form 5, word “religious” is shown. The ld. AR further submits that in column 27 of the same acknowledgment, ITA No. 219/SRT/2023 Nimaaya Welfare Foundation Vs CIT(E) 3 the assessee has mentioned against the column whether the fund or the institution has incurred any expenditure at religious nature-No. 3. The ld. AR of the assessee submits that the assessee has also furnished details of charitable activities by furnishing the details of patients which were treated on charging nominal fees as per object of assessee, details of which are available at page No. 88-89 of the paper book alongwith their complete details from page No. 91 to 101 of the paper book. The ld. AR of the assessee submits that he has filed his affidavit on record that he was entrusted the work for filling application for obtaining registration under Section 12A and 80G of the Act. His staff while filling online application on 25/09/2021 and 30/09/2022 in Form 10A and 10AB had inadvertently selected “Religious” as one of the object. In fact, the object of assessee foundation are not religious in nature. The ld. AR of the assessee submits that the ld. CIT(E) while rejected the application under Section 80G of the Act only on the ground that the assessee has mentioned one of the object as “religious” and that as per Section 80G(5), the said Section applies to any donation or any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2) only, if it is established for a charitable purpose. 4. The ld. AR submits that the assessee retreated that the assessee was set up/established only for charitable purpose. There is no religious object in the Memorandum of Association, copy of which is filed on record. The ld. ITA No. 219/SRT/2023 Nimaaya Welfare Foundation Vs CIT(E) 4 AR of the assessee submits that the assessee is entitled for registration under Section 80G(5) of the Act. 5. On the other hand, the learned Commissioner of Income Tax- Departmental Representative (ld. CIT-DR) for the revenue submits that the assessee itself while filing application mentioned as one of their object as “Religious”. This object is not reverted before ld. CIT(E). The explanation of assessee that it is not religious, came for the first time before the Tribunal. The ld. CIT(E) rejected the application of assessee on the basis of information provided by assessee itself. The assessee does not deserve any relief from the Tribunal. In alternative submission, the ld. CIT-DR for the revenue submits that in case the contention of ld. AR of assessee is accepted, that there is no religious purpose in the object of the assessee, then the matter may be restored back to the file of ld. CIT(E) for examining the case of assessee afresh. 6. We have considered the submissions of both the parties and perused the order of ld. CIT(E) carefully. On careful perusal of order, we find that the assessee filed application for approval of Trust under Section 80G(5) of the Act in Form 10AB electronically on 30/09/2022. The ld. CIT(E) required certain details on the activities carried out by the Trust alongwith details/documents required/mentioned therein. In response to such show cause notice, the assessee furnished details/documents. On considering the details and the documents and the information mentioned in Form ITA No. 219/SRT/2023 Nimaaya Welfare Foundation Vs CIT(E) 5 10AB, the ld. CIT(E) noted that the assessee has mentioned one of their object as “Religious”. However, the ld. CIT(E) was of the view that provisions of Section 80G(5) prescribed that said Section applies to any donation or any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2) only, if it is established in India for a charitable purpose and it fulfils other conditions mentioned therein. Further Section 80G(5)(iii) stipulates that institution of fund is not expressed to be for the benefit of any particular religious, community or caste and is established for charitable purpose. The ld. CIT(E) in para 9 of its order has noted that the assessee himself accepted that some of the object are religious in nature. Thus, the assessee has violated the provisions of the Act and not entitled for approval under Section 80G(5) of the Act and rejected the application. In order words, the sole basis of rejection of assessee’s application is the fact that the assessee has mentioned as one of their object as “Religious”. However, on careful perusal of objection of assessee, copy of which is filed on record, we found that there is no religious object, in the objects of assessee, thus we found merit in the submission of ld. AR of the assessee while filling online Form under Form 10AB, the assessee has inadvertently selected “Religious” as one of their object, though there is no such object in their Memorandum of association. We further find that the assessee has placed on record sufficient material to prove the charitable activities. Otherwise the ITA No. 219/SRT/2023 Nimaaya Welfare Foundation Vs CIT(E) 6 charitable activities are not disputed by the ld. CIT(E). Therefore, considering the facts and circumstances of the present case, we direct the ld. CIT(E) to examine the object of assessee as per their Memorandum of Association and to grant registration under Section 80G(5) of the Act in accordance with law. In the result, the grounds raised by the assessee in this appeal are allowed in above terms. 7. In the result, this appeal of assessee is allowed. Order pronounced on 28/06/2023 in open court. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 28/06/2023 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT(E) 4. DR By Order 5. Guard File Sr. Private Secretary, ITAT Surat
