2014 (1) TMI 759 - AT - Income Tax

Application for registration u/s 12AA - Held that - Following Babu Ram Education Society vs. CIT 2014 (1) TMI 673 - ITAT AGRA - most of the objections raised by the ld. CIT in the impugned order are not relevant for the purpose of grant of registration u/s. 12AA of the IT Act and approval of exemption u/s. 80G(5) of the IT Act - For grant of registration u/s. 12AA, The Commissioner of Income Tax is not required to look into the activities where such activities have not or in the process of its initiation - The objects of the Institution shall have to be seen - The issue of receipt of donations is not relevant - The registration could not have been refused on the ground that the trust has not yet commenced the charitable or religious activities - The genuineness of the objects have to be tested and not the activities which have not commenced - The reasons given by the ld. CIT in the impugned order for rejection of applications are thus not relevant at this stage which may be a separate issue and arise whenever the return of income would be filed by the assessee and would be examined at assessment stage - The issue has been restored for fresh adjudication.

Summary

Issues:
Appeals against rejection of applications for registration u/s. 12AA of the IT Act.

ITA No. 326/Agra/2013 (Shri Rati Ram Shiksha Samiti):
The assessee society applied for registration u/s. 12AA but failed to produce relevant details to prove genuineness of its activities. The Inspector's report revealed discrepancies in donor statements, leading to rejection of the registration application by the ld. CIT. The assessee argued that the issue of donations was not relevant for registration, citing legal precedents. The ITAT referred to the provisions of Section 12AA and the decision of the Hon'ble Allahabad High Court, emphasizing that at the registration stage, the focus should be on the trust's objects' genuineness, not its activities. The ITAT found the objections raised by the ld. CIT irrelevant and directed registration approval, considering the society's educational and charitable aims, ongoing construction, donor confirmations, and educational institution establishment efforts.

ITA No. 327/Agra/2013 (Shri Hari Amrit Charitable Trust):
The issues in this appeal mirrored those of the previous case. Following the decision in ITA No. 326/Agra/2013, the ITAT set aside the ld. CIT's order and instructed a reevaluation of the registration application in accordance with law. The appeal was allowed for statistical purposes in line with the previous judgment. Both appeals were ultimately allowed for statistical purposes, emphasizing the importance of focusing on the genuineness of the trust's objects during the registration process.

In summary, the ITAT Agra, in the judgments of ITA No. 326/Agra/2013 and ITA No. 327/Agra/2013, emphasized the significance of assessing the genuineness of a trust's objects during the registration process under Section 12AA of the IT Act. The decisions highlighted that at the registration stage, the focus should be on the trust's objectives rather than its activities, as supported by legal precedents and statutory provisions. The ITAT directed the ld. CIT to reevaluate the registration applications, considering the trust's educational and charitable aims, ongoing construction efforts, donor confirmations, and establishment initiatives, ultimately allowing both appeals for statistical purposes.