2014 (6) TMI 44 - HC - Income Tax

Allowability of registration u/s 12AA of the Act Genuineness of charitable institution - Charitable activity u/s 2(15) of the Act - The Tribunal was of the view that the objects which were filed by the assessee were charitable in nature and none of the objects were otherwise than charitable - even the AO had recommended that the assessee should be granted registration - the genuinity of the society was not in doubt and carrying on of charitable activities at the time of registration and utilization of funds etc. was not relevant considerations to be scanned at the time of grant of registration - the carrying on of charitable activities at the time of registration and the utilization of the funds etc. are not relevant and once the objects of the institution are found to be charitable in nature, registration u/s 12AA has to be granted there is no merit in the reasoning of Commissioner to reject registration - The applicant society is not required to prove its case that the project is to be run under its name in a charitable manner - The genuinity of the society is not in doubt - the reasons given by Commissioner for refusing registration u/s 12A are not legally valid the order of the Tribunal is upheld no substantial question of law arises for consideration Decided against Revenue.

Summary

Issues:
1. Registration under Section 12AA of the Income Tax Act.
2. Consideration of charitable activities and financial genuineness for registration.
3. Tribunal's authority in granting registration based on charitable nature of objects.

Analysis:
1. The appeal was filed by the revenue challenging the Tribunal's order granting registration under Section 12AA of the Income Tax Act to a society. The revenue contended that the society was not genuinely charitable and thus ineligible for registration.

2. The Tribunal found that all objects of the society were charitable in nature, as confirmed by the Assessing Officer's report recommending registration. The Tribunal held that the genuineness of the society and its charitable activities at the time of registration were crucial, not the utilization of funds. The Tribunal emphasized that once charitable objects were established, registration under Section 12AA had to be granted.

3. The Tribunal's decision was based on the charitable nature of the society's objects and the lack of doubt regarding its genuineness. The Tribunal dismissed the revenue's arguments, stating that the reasons for rejecting registration were not legally valid. As the findings were not shown to be illegal or erroneous, the appeal was dismissed, affirming the Tribunal's decision to grant registration based on the charitable nature of the society's objects.

This detailed analysis highlights the key legal issues surrounding the registration of a society under the Income Tax Act, emphasizing the importance of charitable activities and genuineness in determining eligibility for registration under Section 12AA.