2017 (2) TMI 692 - AT - Income Tax

Exemption u/s 80G(5) - Held that - There is no dispute with regard to the fact that the assessee has been granted registration under section 12AA of the Act - Held that - Once, the registration under section 12AA has been granted, the approval under section 80G should not be denied unless the case of the appellant falls under non-fulfillment of one or more of the conditions specified in section 80G(5). See Hemdha Medi Resources Pvt. Ltd. vs. CIT (Exemptions) 2016 (7) TMI 944 - ITAT JAIPUR - Decided in favour of assessee

Summary

Issues:
- Rejection of application for exemption u/s 80G(5) of the Income Tax Act, 1961.

Detailed Analysis:

Issue 1: Rejection of Exemption Application
The appeal challenged the rejection of the assessee's application for exemption under section 80G(5)(vi) of the Income Tax Act, 1961 by the ld. CIT (Exemptions), Jaipur. The assessee's application was rejected on the grounds of no significant activities being started by the applicant as per the objects stated. The assessee contended that all requirements for approval under section 80G(5)(vi) were fulfilled, and the registration under section 12AA had been granted, indicating genuineness of the objects and activities. The assessee argued that the Act does not mandate significant activities for approval under section 80G and cited relevant case laws to support the contention that registration under section 12AA should be based on the genuineness of objects, not activities. The Tribunal noted that the assessee had been granted registration under section 12AA, and following consistent views from previous cases, directed the ld. CIT (Exemptions) to grant approval under section 80G(5)(vi) to the appellant, thereby allowing the appeal.

This judgment highlights the importance of fulfilling statutory requirements for exemption applications under the Income Tax Act, emphasizing the distinction between registration based on objects and activities. It also underscores the significance of case laws in interpreting and applying tax laws consistently.

This detailed analysis provides a comprehensive overview of the legal judgment, focusing on the rejection of the exemption application and the subsequent appeal process, incorporating relevant legal arguments and case law references to support the final decision.