2015 (3) TMI 1293 - AT - Income Tax

Rejection of registration u/s 12AA - proof of objects of the trust and genuineness of its activities - Held that - CIT has to satisfy about the objects of the trust and genuineness of its activities. CIT(A) has not pointed out any of the object of non-charitable or any non-genuine activity. The assessee has filed brief notes of the activities of the Society along with newspaper cuttings to substantiate that the activities of the Society have been widely reported in various news papers/media, along with various vouchers for the expenditure incurred. During the year ending 31.03.2013 starting from 01.11.2012 for five months, the assessee has incurred expenditure of ₹ 34,726/- out of donations received. The income & expenditure has been incurred to help the needy persons, widows & needy families, students and society expenses etc., which in fact, are in consonance with the objects of the Society available at PB 3 to 5. On perusal of the same alongwith brief notes of the activities of the Society and newspapers cuttings etc., placed on record, we find that none of the expenditure is found to be of non-charitable nature and therefore, even if the activities of the assessee Society and the donations are negligible according to the ld. CIT, the ld. CIT cannot refuse registration u/s 12AA(1) of the Act. CIT(A) is not justified in refusing registration u/s 12AA(1) of the Act and accordingly the order of the ld. CIT(A) is cancelled - Decided in favour of assessee.

Summary

Issues:
Registration u/s 12AA of the Income Tax Act, 1961

Analysis:

Issue 1:
The appeal concerns the rejection of registration u/s 12AA of the Income Tax Act, 1961 by the Commissioner of Income Tax (CIT), Bathinda.

Issue 2:
The main contention raised by the assessee was the unjustified rejection of registration by the CIT based on the grounds of premature application and lack of charitable activities.

Issue 3:
The key argument presented by the assessee's counsel focused on demonstrating the charitable nature of the activities carried out by the society to support the registration application.

Issue 4:
The Departmental Representative (DR) supported the CIT's decision based on the negligible activities of the trust, leading to doubts regarding the genuineness of its operations.

Issue 5:
Upon detailed examination, the Appellate Tribunal found that the assessee had fulfilled the necessary requirements for registration, including submitting relevant documents and demonstrating charitable activities.

Issue 6:
The Tribunal relied on legal precedents, such as the decisions of the Hon'ble Madras High Court and the Hon'ble Gujarat High Court, to support its conclusion that the CIT's rejection was unfounded.

Issue 7:
Consequently, the Tribunal ruled in favor of the assessee, overturning the CIT's decision and directing the grant of registration u/s 12AA(1) of the Act. All grounds of the assessee were allowed.

Conclusion:
The Appellate Tribunal's judgment highlighted the importance of satisfying the objectives and genuineness of activities for registration u/s 12AA of the Income Tax Act, emphasizing that the absence of commenced activities should not be a sole reason for rejection. The decision was based on a thorough analysis of the facts, legal principles, and precedents, ultimately granting the registration sought by the society.