2011 (1) TMI 1398 - AT - Income Tax

Summary

Issues involved: Appeal against denial of recognition u/s. 80G(5)(vi) of the Act by the ld. Commissioner of Income Tax.

The assessee trust applied for registration u/s. 12A and recognition u/s. 80G of the Act. The ld. CIT granted registration u/s. 12A but denied approval u/s. 80G stating that the trust had not commenced activities at the time of application, and accounts could not be annexed. The ld. CIT held that the application was premature as the trust's income qualification for exemption u/s. 11 could only be determined at the end of the accounting period. The trust's activities included providing note books to school children and promoting local cultural heritage. The ld. CIT emphasized that compliance with sections 11, 12, and 13 must be assessed for the entire year, not a part period, and the trust's undated certificate u/s. 13(1)(c) did not establish compliance for the remaining financial year. The application for approval u/s. 80G in Form 10G was deemed premature due to non-satisfaction of Act conditions.

The assessee argued that the ld. CIT's order u/s. 80G was time-barred u/s. Rule 11AA(6) and recognition should be deemed granted. Alternatively, it was contended that recognition should have been granted as all Act requirements were met. The ld. DR supported the CIT's order and suggested the trust could reapply for recognition u/s. 80G for a fresh assessment.

The ITAT noted that the application was forwarded to the jurisdictional CIT(E) by the Revenue, establishing the filing date as the date of receipt by the authority. The order u/s. 80G(5)(iv) was within the statutory limitation period. Regarding merits, the ITAT highlighted that recognition u/s. 80G should not be contingent on income derivation and compliance verification post-income generation. The trust's entitlement to recognition u/s. 80G was affirmed based on compliance with Act provisions and timely application submission. The ITAT directed the ld. CIT(Exemption) to grant recognition u/s. 80G(5)(vi) in accordance with the Act.

Judgement: The ITAT allowed the appeal of the assessee, emphasizing the trust's entitlement to recognition u/s. 80G based on compliance with Act provisions and timely application submission. The ITAT directed the ld. CIT(Exemption) to grant recognition u/s. 80G(5)(vi) in accordance with the Act.