By TIOL News Service

ALLAHABAD, FEB 05, 2014: THE issues before the HC are - Whether if the assessee-Trust which has listed out many charitable activities as objectives, has been able to organise only yoga camp, Section 80G benefits are not available to it; Whether the statute requires that in order to acquire the status of a trust, assessee should carry out all the activities which are mentioned in the objects clause and Whether the activity of conducting Yoga Camps constitutes a charitable activity. And the answers go in favour of the assessee.

Facts of the case

The assessee Trust had filed an application against the original rejection of application filed u/s 80G. The appeal before the Tribunal was filed against the order of CIT denying the recognition u/s 80G(5)(vi). Tribunal had remanded the proceeding back to the CIT for fresh consideration. The CIT by his order dated 15 February 2012 declined to grant recognition on the ground that (i) the assessee trust was not carrying out all the charitable activities listed in its objects; (ii) no other activity except for Yoga Camps had been commenced; and (iii) though the dominant object was to establish hospitals and to impart medical treatment, those activities had still not commenced.

During appeal, the Tribunal noted that in the proceedings on remand, the assessee placed evidence before the CIT in regard to the organizations of Yoga Camps. The Tribunal noted that this formed part of the objects of the assessee and was an activity of a charitable nature. Moreover, the balance sheet and income and expenditure account for the last two years were filed. The Tribunal was of the view that the CIT had not brought anything on record to demonstrate that the assessee was carrying on an activity which was not of a charitable nature. Thus, CIT's order was set aside and a consequential direction to grant recognition u/s 80G(5)(vi) was issued.

Held that,

++ from a reading of the order of CIT, it is clear that an important circumstance which weighed with him was that the assessee was not carrying out all the activities mentioned in the objects clause of the trust. Now, ex facie the statute does not require that the assessee should carry out all the activities which are mentioned in the objects clause. The fact that the assessee was carrying on the activity of conducting Yoga Camps is not in dispute. As the Tribunal observed and, in our view, correctly, this constitutes a charitable activity. Moreover, it is not the case of the revenue that any activity which is not of a charitable nature is being conducted;

++ in this view of the matter, and since no other ground for rejection was made out by the Commissioner, the order of the Tribunal would not justify any interference. The fact that the assessee was still to commence the activity of establishing a hospital for imparting medical treatment would not by itself result in the rejection of the claim for recognition. There is nothing on the record before the Commissioner to doubt the charitable nature of the activity which is being conducted. Section 80G(5) requires that the institution must be established in India for a charitable purpose. This requirement was duly fulfilled. In this view of the matter, the appeal by the Revenue will not give rise to any substantial question of law and is, accordingly, dismissed. There shall be no order as to costs.

(See 2014-TIOL-145-HC-ALL-IT)