2015 (10) TMI 2664 - AT - Income Tax

Registration u/s 12AA denied - non establishment of carrying out activities for charitable purposes - assessee incurred expenses in all the three years on account of National Championship, State Championship and affiliation entry fees was also paid to Wrestling Federation of India - Held that - We find that the query letter issued by the Ld. CIT (Exemptions) on 11.03.2015 is available and as per the reply submitted by the assessee before Ld. CIT (Exemptions), we find that on all the query of the Ld. CIT (Exemptions), reply of the assessee was submitted before Ld. CIT (Exemptions) along with copy of letter of confirmation of affiliation by Wrestling Federation of India and U.P. Olympic Association. In the facts of the present case, when the assessee has produced independent evidence to establish regarding its charitable activities by submitting certificate from Wrestling Federation of India and U.P. Olympic Association and when as per receipt and payment amount of the assessee for the last three years ending on 31.03.2012, 31.03.2013 and 31.03.2014, the assessee is incurring expenses on account of National Championship and State Championship and paid affiliation and entry fees to Wrestling Federation of India, the claim of the assessee cannot be rejected on this basis alone that books of accounts were not produced. Such affiliation certificate from Wrestling Federation of India and Uttar Pradesh Olympic Association are available on pages 9 and 10 of the paper book before us also. This is not the case of the Ld. CIT (Exemptions) that promoting Wrestling is not charitable activities. We feel that the assessee deserves registration u/s 12AA. Appeal of the assessee is allowed.

Summary

Issues:
Assessee's appeal against Ld. CIT (Exemptions) order u/s 12AA of the Income Tax Act, 1961.

Analysis:
The appeal before the Appellate Tribunal ITAT Lucknow involved the assessment of the assessee's eligibility for registration under section 12AA of the Income Tax Act, 1961. The Ld. AR of the assessee argued that the submissions filed before Ld. CIT (Exemptions) demonstrated the charitable activities carried out by the assessee, including expenses related to National Championship, State Championship, and affiliation fees paid to Wrestling Federation of India. The Ld. DR of the Revenue supported the CIT (A)'s order.

Upon considering the submissions, the Tribunal noted that the assessee had responded to all queries raised by the Ld. CIT (Exemptions) with supporting documents, including confirmation of affiliation by Wrestling Federation of India and U.P. Olympic Association. The key objection of the Ld. CIT (Exemptions) was the non-production of books of accounts and bills/vouchers for verification. However, the Tribunal opined that the independent evidence provided by the assessee, along with the financial records showing expenses on charitable activities, justified granting registration under section 12AA. The affiliation certificates from relevant sporting bodies further supported the assessee's case.

Based on the evidence and facts presented, the Tribunal concluded that the assessee met the requirements for registration under section 12AA of the Act. Therefore, the Tribunal directed the Ld. CIT (Exemptions) to grant registration to the assessee. The appeal of the assessee was allowed, emphasizing the charitable nature of the activities undertaken. The judgment highlights the importance of substantial evidence and compliance with statutory requirements in establishing eligibility for tax exemptions under charitable provisions.