2017 (2) TMI 652 - AT - Income Tax

Non granting the registration no. u/s 12AA - objects of the assessee trust are not charitable - assessee filed an application u/s 154 before the ld. CIT which has also been rejected on the ground that there is no mistake apparent on record in his order as to refusal of registration of the trust - Held that - It is noted from the records that the assessee trust was constituted on 5-05-1955 and it was granted permission for registration by the Sahayak Dev Sansthan Ayukt, Jaipur vide order dated 5-04-1972. The issue in question arises from the submission of the ld. AR of the trust that the assessee trust was established before the commencement of the Income Tax Act, 1961 and the provisions of Section 13(1)(b) are not applicable. The prayer of the ld. AR of the assessee trust was that the he was not provided an opportunity of being heard into the merits of the trust. Hence, in view of the above facts and circumstances of the case, the appeal of the assessee trust is restored to the file of the ld. CIT (Exemptions) to decide it afresh by providing reasonable opportunity of being heard to the ld. AR of the assessee trust. The ld. AR of the assessee trust is also directed to submit all the relevant papers concerning the registration of the trust before the ld. CIT (Exemptions). - Decided in favour of assessee trust for statistical purposes.

Summary

Issues:
1. Rejection of application u/s 154 without providing a reasonable opportunity of being heard.
2. Failure to rectify the order despite all facts being on record.
3. Denial of registration under section 12AA despite documents showing the trust's establishment before the Income Tax Act.

Analysis:
1. The appeal was filed against the rejection of the application u/s 154 without a proper hearing. The ld. CIT (Exemptions) rejected the application stating it was a point of law, not a factual mistake. The trust's application was dismissed, citing no apparent mistake. The trust argued it was established before the Income Tax Act, thus Section 13(1)(b) doesn't apply. The appeal was dismissed without proper consideration, leading to a restoration for a fresh decision with a fair hearing.

2. The order's failure to rectify despite facts being on record was a key issue. The trust's application for registration was denied based on non-charitable objects. The trust claimed it was established before the Act, supported by documents. The trust was not given a fair opportunity to present its case. The appeal highlighted the need for a thorough review and consideration of all relevant documents.

3. The denial of registration under section 12AA was a significant concern. The trust's establishment before the Act was crucial in determining applicability. The trust's submission regarding the trust's formation and permissions granted was not adequately considered. The appeal emphasized the importance of a proper hearing and submission of relevant papers for a fair decision. The judgment allowed the appeal for statistical purposes, emphasizing the need for a fresh review with all relevant documents presented.