2013 (3) TMI 860 - AT - Income Tax

Summary

Issues Involved:
1. Rejection of application for registration u/s 12AA of the Income Tax Act, 1961.
2. Rejection of application for approval u/s 80G of the Income Tax Act, 1961.

Summary:

Issue 1: Rejection of application for registration u/s 12AA of the Income Tax Act, 1961

The assessee filed Form No.10A for registration u/s 12AA on 10.04.2012. The CIT rejected the application on the grounds that the trust's activities were purely religious and not charitable as defined in Sec. 2(15) of the Act. The assessee argued that the trust's activities, including running a gaushala, dispensary, and organizing bhandaras, were charitable. The Tribunal referred to various judicial pronouncements, including the Hon'ble Supreme Court's decision in American Hotel and Lodging Association Educational Institute vs. CBDT, which emphasized examining the nature, activities, and genuineness of the institution. The Tribunal concluded that the CIT failed to appreciate the charitable nature of the trust's activities and directed the CIT to grant registration u/s 12A/12AA of the Act w.e.f. 10.04.2012.

Issue 2: Rejection of application for approval u/s 80G of the Income Tax Act, 1961

The assessee filed Form No.10G for approval u/s 80G on 10.04.2012. The CIT rejected the application for the same reasons as the rejection of the application u/s 12AA. The Tribunal observed that the conditions laid down in Rule 11AA and clauses (i) to (v) of sub-section (5) of section 80G were fulfilled by the assessee. The Tribunal referred to judicial pronouncements, including the I.T.A.T., Nagpur Bench in the case of Shiv Mandir Devsttan Panch Committee Sanstan Nagpur vs. CIT-1 Nagpur, which held that worship and maintenance of temples do not necessarily constitute religious activities. The Tribunal concluded that the CIT's order was not in accordance with the law and directed the CIT to grant approval u/s 80G of the Act w.e.f. 10.04.2012.

Conclusion:

The Tribunal directed the CIT to grant registration u/s 12A/12AA and approval u/s 80G of the Income Tax Act, 1961, w.e.f. 10.04.2012, within thirty days from the date of the order. Both appeals filed by the assessee were allowed.