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2012 (5) TMI 664 - AT - Income TaxGrant of registration u/s 12A rejected - Held that - We find no merit in the order of the Commissioner of Income Tax in observation that no charitable activity had been undertaken during the financial year 2007-08 and in the subsequent years which is contrary to the finding of Tribunal in para 7 of the order dated 30.7.2010. The order of the Commissioner of Income Tax in rejecting the registration to the assessee while giving effect to the order of the Tribunal under section 12AA r.w.s. 254 of the Act merits to be dismissed for the above said lapses. The assessee having fulfilled the conditions for grant of registration under section 12A of the Act, we hold the assessee entitled to the registration of the trust for carrying out the charitable activities of imparting education. The Commissioner of Income Tax is directed to pass consequential granting registration under section 12AA of the Act to the assessee. The grounds of appeal raised by the assessee are thus allowed.
Issues Involved:
1. Defective order by the Commissioner of Income Tax. 2. Rejection of the application for registration under section 12A of the Income Tax Act. 3. Ignoring Tribunal's directions and lack of new facts by the Commissioner of Income Tax. Detailed Analysis: 1. Defective Order by the Commissioner of Income Tax: The assessee argued that the order passed by the Commissioner of Income Tax-II, Chandigarh, was defective both in law and on the facts of the case. The Tribunal noted that the Commissioner had not adhered to the Tribunal's previous directions and had overstepped his jurisdiction by re-evaluating settled issues. The Tribunal emphasized the necessity for judicial discipline and adherence to higher appellate authorities' orders, citing precedents such as Kamalakshi Finance Corporation Ltd. and others to underline the importance of following judicial hierarchy and maintaining consistency in legal rulings. 2. Rejection of the Application for Registration under Section 12A: The Tribunal reviewed the case's history, noting that the assessee trust was created in 2002 but applied for registration only in 2008. The Commissioner had initially rejected the application, questioning the genuineness of the trust's activities. The Tribunal had previously restored the matter to the Commissioner, who again rejected the application. The Tribunal found that the assessee had undertaken activities such as purchasing land and constructing a school building, which were in line with its charitable objectives. The Tribunal held that these activities constituted application for charitable purposes and that the collaboration with M/s Fountainhead to run the school further established the trust's bona fides. 3. Ignoring Tribunal's Directions and Lack of New Facts by the Commissioner of Income Tax: The Tribunal criticized the Commissioner for ignoring its previous directions and failing to bring any new facts to the record. The Tribunal had earlier directed the Commissioner to reconsider the registration issue in light of the Punjab & Haryana High Court's ruling in Pinegrove International Charitable Trust & Ors Vs Union of India and Ors., which dissented from the Uttarakhand High Court's decision in CIT, Haldwani Vs M/s Queen's Educational Society. The Tribunal found that the Commissioner had not adhered to these directions and had instead re-evaluated the trust's activities beyond his jurisdiction. Conclusion: The Tribunal concluded that there was no merit in the Commissioner's order rejecting the registration under section 12A. The Tribunal reiterated that the assessee trust was entitled to registration from the date of filing the application. The Tribunal directed the Commissioner to grant registration under section 12AA, emphasizing that the assessee had fulfilled all necessary conditions for such registration. The appeal was allowed, and the Tribunal's order was pronounced in open court on May 31, 2012.
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