2011 (2) TMI 1447 - AT - Income Tax

Summary

Issues Involved:
Appeal against rejection of registration u/s 12AA and exemption u/s 80G of the Income-tax Act, 1961.

Issue 1: Registration under Section 12AA

The assessee, a society registered under the Tamil Nadu Registration Act, applied for registration under section 12AA and exemption under section 80G of the Act. The Director of Income Tax (Exemptions) rejected the applications citing reasons such as deletion of object clause 3(b) and non-charitable nature of certain activities. The assessee appealed, arguing that the objects of the Trust are charitable, and the rejection was based on frivolous issues. The ITAT Chennai found that the Trust's activities were indeed charitable, and the CIT erred in rejecting the registration without proper examination. Referring to the scope of enquiry under section 12AA, the ITAT directed the DIT (Exemptions) to grant registration under section 12AA and approval under section 80G to the assessee-Trust.

Key Points:
- The CIT's duty was to ensure the genuineness of the Trust's activities.
- The Trust's objects were found to be charitable.
- CIT erred in rejecting registration without proper examination.
- Scope of enquiry under section 12AA is limited.
- DIT (Exemptions) directed to grant registration and approval.

Issue 2: Grounds of Appeal

The assessee raised several grounds of appeal against the rejection of registration under section 12AA by the Commissioner of Income Tax. These grounds included errors in facts and law, failure to dispose of the application within the prescribed period, hasty disposal without proper consideration, and overlooking documentary evidence about the Trust's activities. The ITAT Chennai considered these grounds, noting that the Commissioner had not adequately examined the genuineness of the Trust's activities and had made observations without proper evaluation. The ITAT held that the Commissioner's conclusion was hyper-technical and directed the grant of registration under section 12AA.

Key Points:
- Grounds of appeal included errors in facts and law.
- Commissioner failed to dispose of the application within the prescribed period.
- Commissioner's disposal was hasty and lacked proper consideration.
- Observations made without proper evaluation.
- Conclusion deemed hyper-technical.

Separate Judgement:
No separate judgement was delivered by the judges.