Wednesday, April 16, 2014

Sec. 80G approval denied to a society working for upliftment of Sikh community explicitly

Approval under section 80G could not be given to a society working only for upliftment of Sikh community and barring an outsider from becoming its member.
Facts:
a)  The assessee-society had applied for approval under section80G(5)(vi).
b)  The commissioner rejected the application of approval on ground that society was created for the benefit of a particular religious community and, thus, it did not fulfill the conditions of clause (iii) of section 80G(5).
c)  The aggrieved-assessee filed the instant appeal.

The Tribunal held in favour of revenue as under:
1)  The assessee-society was working only for upliftment of Sikh community and was imparting various types of education to them;
2)  Only a Sikh could become a member of the general community of the assessee-society who was controlling the entire administration of the institutions run by the society; which was contrary to the provisions of section 80G(5)(iii);
3)  The assessee had not filed any documentary evidence to establish that it was not only working for upliftment of the Sikhs but also for general community. There was no evidence to establish that a non-Sikh could become member of General Council of the assessee-society;
4)  The objects of the assessee-society and its name (i.e. ‘Sangat Sahib Bhai Pheru Sikh Educational Society, Faridkot’), clearly established that it was not doing any charitable work for general community and it was using its funds only for Sikh community;

5)  The assessee-society did not fulfill the conditions prescribed under section 80G(5)(iii) and, therefore, it was not entitled to the approval under section 80G(5)(iv). - Sangat Sahib Bhai Pheru Sikh Educational Society v. CIT [2014] 43 taxmann.com 368 (Amritsar - Trib.)
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