Please Note, Section 80G approval couldn’t be denied just because there was possibility of misuse of donations.

[2019] 105 taxmann.com 13 (Amritsar – Trib.)

IT: Merely because assessee charitable educational institution was prosperous and failed to state as to why there was need for donations and it failed to submit list of proposed donors, approval under section 80(5)(vi) could not be denied merely upon possibility of misuse of donations

Section 80G, read with section 12AA, of the Income-tax Act, 1961 – Donation to certain funds, charitable institutions (Approval under sub-section (5)(vi)) – Assessee-society was a charitable educational institution registered under section 12AA – It filed application for approval under section 80G – Commissioner (Exemptions) found continuous surplus in hands of institution; that assessee-society did not need donations to support its activities; that assessee was evasive in demonstrating and providing list of prospective donors; that such approval was sought to accept capitation fee for acquiring admissions of students, camouflaged as donations; and that there was possibility of misuse of donations – Whether assessee, having no dearth of funds, would not risk its reputation by asking for ill gotten money and, thus, misuse of donation was a ‘distant possibility’ – Held, yes – Whether approval was to be granted provided that assessee gave legal undertaking to revenue that it would not seek donation/capitation fees from admission seekers in various educational or training institutions run by assessee-society – Held, yes

Adesh Foundation (Regd.)