2014 (1) TMI 1906 - AT - Income Tax

Exemption u/s 11 - registration under Section 12AA - Proof of charitable activity u/s 2(15) - HELD THAT - Merely filing an application for registration u/s 12AA and showing in writing that the aims and objects of the assessee trust are charitable, are not sufficient for granting registration to the society u/s 12AA of the Act until and unless the authority, who grants the registration, satisfies himself that the activities of the trust or institution are genuine or not. To satisfy himself he can make such inquiry as he deem necessary. There is no bar under any provision of law that the authority cannot make an inquiry about the genuineness of the activities of the society trust or institution. Like the case on hand, in which the assessee-society remain non-cooperative and has not filed any documentary evidence, as required by learned CIT. The documentary evidence filed by the learned counsel for the assessee along with the case-laws are not helpful to the assessee because the case-laws relied upon by him are not identical to the facts of the present case. - Decided against assessee.

Summary

Issues:
Registration under Section 12AA of the Income Tax Act, 1961.

Analysis:
I. The assessee failed to attend multiple hearings scheduled by the learned CIT, Bathinda, to verify the genuineness of the activities of the trust, hindering the verification of the source of income and its application.

II. Despite opportunities given, the assessee did not appear before the CIT or provide evidence to substantiate the genuineness of the trust's activities, leading to a lack of cooperation in the inquiry process.

III. The Assessing Officer's report highlighted the failure of the assessee to produce donors for verification of donations received, raising doubts on the genuineness of the donations and the nature of the trust's activities.

IV. The CIT, Bathinda, provided ample opportunities for the assessee to present evidence regarding charitable activities but the assessee's non-attendance and failure to produce necessary evidence hindered the verification process.

V. Section 12AA of the Act mandates the Commissioner to verify the genuineness of a trust's activities before granting registration, allowing for inquiries and document requests to ensure compliance with charitable objectives.

VI. The assessee's failure to provide evidence as required by the CIT hindered the verification process, making it challenging for the authority to ascertain the genuineness of the trust's activities.

VII. Mere application and claims of charitable aims are insufficient for registration under Section 12AA; the authority must conduct inquiries to verify the trust's activities' genuineness, as demonstrated in this case where the assessee's lack of cooperation impeded the verification process.

VIII. The impugned order by the CIT, Bathinda, under Section 12AA(1)(b)(ii) was well-reasoned, considering the lack of cooperation and evidence from the assessee, leading to the dismissal of the appeal.

In conclusion, the judgment upholds the CIT's decision based on the lack of cooperation and evidence provided by the assessee, emphasizing the importance of substantiating charitable activities for registration under Section 12AA of the Income Tax Act, 1961.