DIT (EXEMPTIONS) AND ANOTHER Vs. ADHAAR

JUDGEMENT

(1.) THIS appeal is filed by the Revenue being aggrieved by the order passed by the Income -tax Appellate Tribunal, Bangalore Bench A (hereinafter called as Tribunal for brevity) in ITA No. 438/Bang/2008, wherein the Tribunal by reversing the order passed by the Director of IT (Exemptions), Bangalore, has directed the Director of IT (Exemptions) to renew the exemptions granted under section 80G of the IT Act, 1961 (hereinafter called asActfor brevity) by order dt. 19th Dec, 2008.

(2.) THE respondent herein having been granted registration under section 12A and recognition under section 80G of the Act upto to 31 -3 -2007, application was filed for continuation of the recognition under section 80G of the Act to Director of IT (Exemptions). A show -cause notice was issued to the respondent as to why the application for continuation should not be rejected on the ground that there is violation of the provisions of section 11(5) of the Act as shares in a private company had been held for more than one year, contrary to the conditions stipulated in section 13(1)(d)(iia) r/w section 11(5) of the Act.

(3.) BEING aggrieved by the said order respondent preferred ITA No. 438/ Bang/2008 and the Tribunal having found that there is no dispute that the amount is spent by the respondent towards charitable purpose and conditions for continuation of the exemption have been made out, continuation could not be denied by the Director of IT (Exemptions) on the ground of making rowing enquiry into assessment made in violation of conditions stipulated in section 13(1)(d)(iia) r/w section 11(5) of the Act as at the stage of continuation of exemption granted under section 80G of the Act the Director of IT (Exemptions) has to consider the conditions under section 80G of the Act and following the earlier decision of the Tribunal (sic) in the case of N.N. Desai Charitable Trust Vs. Commissioner of Income Tax, (2000) 246 ITR 452 Guj and in the case of Orpat Charitable Trust Vs. Commissioner of Income Tax, (2002) 256 ITR 690 Guj the Tribunal found that the bonus shares were received as donation without being routed through income and expenditure account for the specific purpose being carried out by Nirmala Bangalore and Swachha Bangalore Project Fund in collaboration with Bangalore Corporation was continued by the assessee from the period prior to the asst. yr. 2004 -05 and the amount received by way of dividend should also be included and the dividend received has also been credited to the corpus held in trust by the respondent trust. Wherefore, in view of the finding given by the Director of IT (Exemptions) that respondent -trust is spending the amount for charitable purpose and there is no charitable recognition of the amount. Director of IT (Exemptions) could not have gone into the. details of assessment for every year since no action was taken from 2003 till such sale of shares were made on 3 -10 -2007 if there was any violation of the conditions of grant of exemptions and accordingly, set aside the order passed by the Director of IT (Exemptions) and approved recognition of the trust as applied for.