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2019 (1) TMI 1846 - AT - Income TaxExemption u/s.11 - Denying registration u/s.12AA - HELD THAT - DR did not dispute that the procedure laid down in the Act has been complied with by the assessee for filing application for registration u/s.12AA of the Act. Hence in our considered view in totality of facts and circumstances and judicial principles laid down by the Courts and also for the fact that it is registered with the Commissioner of Charity at Pune registration u/s.12AA of the Act should be granted. It is also open to the Revenue Authority at the time of assessment to verify the activities of the Trust to examine whether they will get exemption u/s.11 of the Act or not and do the needful as per law. We take guidance from the decision of Yogiraj Charity Trust 1976 (3) TMI 5 - SUPREME COURT that if the predominant objects of a trust is charitable in nature then other objects cannot be judged individually whether they are charitable or not meaning thereby if the totality of objects is charitable the requirements of the law are complied with. We set aside the order of Ld. CIT and direct to grant registration u/s.12AA - Appeal of the assessee is allowed.
Issues:
1. Condonation of delay in filing the appeal. 2. Denial of registration u/s.12AA of the Income Tax Act, 1961 to the assessee. 3. Interpretation of the objects clause in the Trust deed for charitable status. 4. Comparison of judicial precedents regarding charitable status. 5. Procedure for granting registration u/s.12AA and its implications. Analysis: Issue 1: Condonation of delay in filing the appeal The appeal was filed with a delay of 483 days. The Assessee submitted an affidavit explaining the reasons for the delay, stating it was not intentional. The Delay was condoned after considering the reasons in the affidavit, as the delay was satisfactorily explained. Issue 2: Denial of registration u/s.12AA The Assessee, a charitable trust, was denied registration u/s.12AA based on the Trust deed's objects clause not being entirely charitable. The Assessee argued that the decision of the Delhi High Court cited by the CIT was not applicable to the registration issue. The Tribunal emphasized that the primary purpose being charitable, ancillary non-charitable objects do not affect the Trust's charitable status. Issue 3: Interpretation of the objects clause for charitable status The Tribunal highlighted that the Trust's objects being predominantly charitable, other non-charitable objects do not disqualify it from being a valid charity. The Tribunal referred to legal precedents, emphasizing that the Trust's overall charitable nature determines its eligibility for registration u/s.12AA. Issue 4: Comparison of judicial precedents The Tribunal compared the decision of the Delhi High Court on exemption u/s.11 with the current case on registration u/s.12AA. It distinguished between the two issues and relied on the Supreme Court's decision emphasizing the charitable nature of the Trust's predominant objects. Issue 5: Procedure for granting registration u/s.12AA The Tribunal clarified that the registration process under u/s.12AA is distinct from assessing the Trust's charitable activities for exemption u/s.11. Compliance with the registration procedure warrants granting registration, leaving the assessment of charitable activities for the assessment stage. The Tribunal directed to grant registration u/s.12AA to the Assessee Trust, allowing the appeal. This detailed analysis of the judgment emphasizes the importance of the Trust's predominant charitable purpose for registration under u/s.12AA, while distinguishing between registration and exemption issues under the Income Tax Act.
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