2015 (12) TMI 1841 - AT - Income Tax

Exemption u/s 11 - rejection of application for registration u/s 12A - assessee failed to produce necessary details and documents about objects of the trust and genuineness of the activity - HELD THAT - The activities of the trust have to be considered if such registration is sought much after the formation of trust or after expiry of the earlier registration granted in favour of the trust. The Hon ble High Court in case of Meenakshi Amma Endowment Trust 2010 (11) TMI 853 - KARNATAKA HIGH COURT has observed that if the assessee is seeking immediately after formation then, there is no provision under the Act for seeking such registration. If assessee satisfies the condition as required for registration u/s 12A. Further, the CIT(E) has not pointed out anything against objects of the assessee being not charitable in nature. Therefore, we direct the CIT(E) to grant registration u/s 12A to the assessee. Recognition u/s 80G - CIT(E) has rejected the application of the assessee by giving reference of the order whereby application for registration u/s 12A was rejected - In view of our finding that registration u/s 12A, assessee is entitled for registration u/s 80G of the Act as well.

Summary

Issues:
Appeal against rejection of application for registration u/s 12A and sec.80G(5) of the Income-tax Act, 1961.

Analysis:
1. Registration u/s 12A:
- The assessee's application for registration u/s 12A and sec.80G was rejected by the CIT(E) despite the submission of required details and documents.
- The assessee provided necessary details regarding fixed deposits, donations, investments, and charitable work done by the trust.
- The CIT(E) rejected the application citing lack of interest from the assessee in prosecuting the case and alleged defects in the documents submitted.
- The trust deed outlined charitable objectives, and the assessee complied with all requisitions made by the CIT(E).
- The Tribunal referred to the judgment in the case of Meenakshi Amma Endowment Trust to support the assessee's contention that immediate charitable activities were not mandatory for registration.
- The Tribunal concluded that the assessee met the conditions for registration u/s 12A, and directed the CIT(E) to grant registration to the assessee.

2. Recognition u/s 80G:
- The CIT(E) rejected the application for recognition u/s 80G based on the rejection of registration u/s 12A.
- Since the Tribunal allowed the appeal for registration u/s 12A, the assessee was deemed entitled to registration u/s 80G as well.

In conclusion, the Tribunal allowed the appeals of the assessee, directing the CIT(E) to grant registration u/s 12A and sec.80G to the assessee. The judgment emphasized the importance of fulfilling statutory requirements for registration and recognized the charitable nature of the trust's objectives as per the trust deed.