2018 (2) TMI 1891 - HC - Income Tax

Grant of approval u/s 80-G by tribunal - as per revenue Registration u/s 12-A was denied by the CIT and the same is a precondition for grant of approval u/s 80-G of the act besides the conditions laid down in Clause (a) of the proviso to Section 80-G (5) were not fulfilled - HELD THAT - As of today the assessee stands registered as a charitable institution under Section 12-A of the Act. The natural corollary is that this application under Section 80G(5) of the Act also becomes liable to be allowed.

Summary

Issues:
1. Interpretation of Section 80-G of the Income Tax Act
2. Rejection of registration under Section 12-AA of the Act
3. Impact of registration under Section 12-A on Section 80-G relief

Analysis:
The High Court heard arguments from both parties regarding an appeal under Section 260-A of the Income Tax Act. The department challenged a Tribunal order, questioning the justification of directing the CIT to grant approval under Section 80-G to the assessee. The department argued that registration under Section 12-A is a prerequisite for Section 80-G approval, and certain conditions were not fulfilled. The facts revealed that the assessee, a registered society engaged in charitable activities, had applied for registration under Section 12-AA and relief under Section 80-G(5) of the Act, leading to two appeals.

The application under Section 12-AA was initially rejected, prompting an appeal that reached the High Court. In Income Tax Appeal No.139 of 2011, the Court found no adverse material against the assessee, concluding that it qualified as a charitable institution under Section 12-A. Consequently, the assessee now holds registration under Section 12-A, making the application under Section 80-G(5) justifiable.

The Court ruled in favor of the assessee, emphasizing that the registration under Section 12-A supports the allowance of relief under Section 80-G. Therefore, the appeal was dismissed, affirming the decision in favor of the assessee.