JUDGMENT :

Sanjay Vashisth, J.

By filing the instant writ petition, the petitioner, namely, Mumukshu Mandal (Regd.) Shri Geeta Mandir, Panipat, has assailed the order dated 20.03.2006 (Annexure P-1), passed by respondent No. 1 -Commissioner of Income Tax, Karnal (CIT), whereby the petitioner has been denied registration under Section 80G(5)(vi) of the Income Tax Act, 1961 (for short, 'the 1961 Act'), for deduction out of total income on donation to be made available to donors on the basis of such registration.

2. The petitioner is a Society duly registered under the Societies Registration Act, 1860, vide Registration Certificate No. 45 of 1973-74, dated 2.11.1973 (Annexure P-6), and engaged in the social/charitable activities, especially for the welfare of downtrodden, poor and destitute sections of the society. It is claimed that the petitioner Society had also been granted certificate by the Income Tax Department, since 1974, regarding its entitlement for deduction under Section 80G of the 1961 Act, which was further renewed from time to time. To fortify this assertion, the petitioner Society has placed on record letters dated 19.9.1984, 9.5.1988, 4/5.2.1993, 8/9.2.1999 and 18/23.9.2002, as Annexure P-3 (Colly) with the writ petition.

3. The petitioner Society has also been granted registration in terms of Section 12AA of the 1961 Act, because since its inception, the petitioner Society was carrying out charitable activities in terms of Section 11 read with Section 2(15) of the 1961 Act. Accordingly, right from the very beginning, the income of the petitioner Society had been exempted from tax. In this regard, copies of various returns showing nil taxable income, as well as assessment orders passed under Section 143(1) and 143(3) of the 1961 Act, have been placed on record as Annexures P-4 (Colly) and P-5 (Colly), respectively.

4. The petitioner Society filed an application in Form No. 10G, dated 23.09.2005 (Annexure P-7), for renewal of exemption under Section 80G(5) of the 1961 Act, for further period from 01.04.2005 to 31.03.2008, before respondent No. 1 - CIT. At the time of hearing of the exemption application (Annexure P-7), the petitioner Society was asked to explain/furnish the following details in respect of all its branches:-

"i) Nature of donations/corpus donations as the trust has used about 54 lakhs in fixed assets alongwith the details of such donations above Rs. 5000/- per person per year with PAN and complete address.

ii) For the funds not utilised by the trust of Rs. 30 lakhs, has the condition given in section ll(2)(a) being complied with, if so, details thereof.

iii) Produce the minutes book in which decision for opening library/ is taken by the trustees.

iv) Whether Bhandaras and Gaushala expenses etc. are covered under charitable purposes u/s 2(15) of the Act.

v) When there is cash in hand available, why withdrawals of cash made from various banks on various dates? "

5. In response, the part books were produced, but without bank statements. Therefore, the petitioner society was asked to furnish the bank statements alongwith some more information, such as:-

"i) Please explain when there is no balance sheet for Panipat then how the Head Office of the society is being run from Panipat.

ii) There is a lot of overwriting in cash book of current financial year. Asked to explain the reasons for the same.

iii) To produce the bank statement of all the branches for the current year.

iv) How much amount has been spent on Bhandra and other charitable purposes during the last five years?

v) The exemption granted to the society u/s 80G(5) expired on 31.3.2005 but the society continued to mention on the donation receipts issued after 31.3.2005 that it enjoys exemption u/s 80G(5), whereas, application for renewal was filed on 23.9.2005. Asked to explain the reasons for the same.

vi) To produce the donation receipt books for Vrindavan office.

vii) The society has raised bank loan against FDR on 28.1.2006. In this connection, requested to