2011 (6) TMI 904 - AT - Income Tax

Denied Registration u/s 12AA - Exemption u/s 80G - Registration was denied as Assessee didn't commence its activities as contemplated in the Trust Deed - The registration u/s. 80G has also been denied for the same reason HELD THAT - In assessee's own case M/S. GINIA DEVI TODI CHARITABLE TRUST VERSUS DIRECTOR OF INCOME-TAX (EXEMPTION) 2010 (4) TMI 1155 - ITAT KOLKATA , the case of DHARMA SANSTHAPAK SANGH (NIYAS). VERSUS COMMISSIONER OF INCOME-TAX. 2008 (8) TMI 393 - ITAT DELHI-A was followed, where it was held that the objects of the trust are specifying purpose of religious activities. The registration cannot be denied to the assessee for the reason that it is not carrying on charitable activities. Religious activities are also construed to be charitable activities as per the decision of Hon ble Allahabad High Court in the case of COMMISSIONER OF INCOME-TAX VERSUS RADHASWAMI SATSANG SABHA 1953 (10) TMI 36 - ALLAHABAD HIGH COURT and the decision of the Hon ble Supreme Court in the case of HAZARAT PIRMAHOMED SHAH SAHEB ROZA COMMITTEE VERSUS COMMISSIONER OF INCOME-TAX, GUJARAT 1966 (10) TMI 43 - SUPREME COURT . The carrying of charitable activity at the stage of commencement of institution is not relevant to decide that whether such trust/ institution is entitled for registration. So long the objects of the trust are charitable in nature, registration cannot be refused Respectfully following the precedent, we direct the D.I.T. (E) to grant registration to the assessee-trust u/s. 12AA and also grant exemption certificate u/s. 80G - Decision in favour of Assessee.

Summary

Issues:
1. Delay in filing the appeal for grant of initial exemption u/s. 80G.
2. Denial of registration u/s. 12AA due to non-commencement of activities as per Trust Deed.
3. Tribunal's direction to grant registration u/s. 12AA and exemption certificate u/s. 80G based on precedents.

Analysis:

Issue 1: Delay in filing the appeal
The appeal was filed against the rejection of initial exemption u/s. 80G. The appeal was initially delayed by 189 days, but the assessee submitted a condonation petition explaining the reasons for the delay. The Tribunal considered the details provided and found that the assessee had reasonable cause for the delay. Consequently, the Tribunal condoned the delay and proceeded to decide the appeal on its merits.

Issue 2: Denial of registration u/s. 12AA
The assessee was denied registration u/s. 12AA primarily because the activities as per the Trust Deed had not commenced. However, based on a previous Tribunal decision in a similar case, the Tribunal directed the DIT(E) to grant registration u/s. 12AA. The denial of registration u/s. 80G was also based on the same reason, but the Tribunal, following its own precedent, allowed the assessee's appeal for registration u/s. 12AA and directed the DIT(E) to grant registration to the assessee-trust.

Issue 3: Tribunal's direction based on precedents
The Tribunal relied on previous decisions in similar cases to grant registration u/s. 12AA and exemption certificate u/s. 80G to the assessee-trust. The Tribunal referred to specific cases and emphasized that as long as the objects of the trust are charitable in nature, registration cannot be refused. The Tribunal followed the precedent set in those cases and directed the DIT(E) to grant the necessary registrations and exemptions to the assessee-trust.

In conclusion, the Tribunal allowed the appeal of the assessee based on the precedents and directions given in similar cases, emphasizing the importance of charitable nature of trust objects in granting registrations and exemptions under the Income Tax Act.