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2018 (3) TMI 1191 - AT - Income TaxRefusing to grant registration u/s.12AA - Trust Deed does not contain dissolution clause - Held that - A perusal of the impugned order of the ld. DIT (Exemptions) however shows that he has not recorded any adverse comment or dis-satisfaction about the object of the Trust or genuineness of the Trust activities. He has refused to grant the registration u/s 12A of the Act on the ground that its Trust Deed does not contain dissolution clause . DIT (Exemptions) thus has clearly gone beyond the scope of enquiry contemplated u/s 12A of the Act and has refused to grant the registration u/s 12A of the Act to the assessee Trust on a totally irrelevant ground without pointing out as to how he was not satisfied either about the object of the Trust or the genuineness of its activities. CIT(E) has not given any finding in his order that either the objects of the assessee company are not charitable or its activities are not genuine hence he was not justified in refusing to grant registration u/s.12AA of the Act and approval u/s.80G of the Act to the assessee company. - Decided in favour of assessee.
Issues Involved:
- Refusal to grant registration u/s.12AA of the Income Tax Act to the assessee company by the CIT(Exemptions), Hyderabad. Detailed Analysis: Issue 1: Refusal to grant registration u/s.12AA The sole issue in this appeal was the refusal of the CIT(Exemptions), Hyderabad to grant registration u/s.12AA of the Income Tax Act to the assessee company. The CIT(E) based the refusal on the observation that the objective clauses of the Memorandum of Association (MoA) of the company were not specific and were of a general nature. The CIT(E) highlighted specific clauses from the MoA, indicating that the company intended to extend its operations abroad, which was seen as a violation of the provisions of section 11(1)(a) of the Act. Furthermore, the CIT(E) found that the objective clauses did not specify the nature of activities and how they qualified under section 2(15) of the Income Tax Act. The CIT(E) concluded that the objective clauses were general and not specific enough to qualify for registration u/s.12AA. Issue 2: Appellant's Arguments The appellant argued that the company was established at the direction of the Government of India, Department of Science & Technology, and provided evidence to support this claim. The appellant submitted documents, including letters and minutes of meetings, to demonstrate that the company was set up as a Technology Business Incubator (TBI) to support technology-based ventures in Odisha. The appellant also highlighted the credibility of the directors and subscribers to the MoA, as well as the financial support received from the Department of Science and Technology, Government of India. Additionally, the appellant presented notifications and gazette publications to further support the company's eligibility for registration u/s.12AA. Issue 3: Tribunal's Decision After considering the submissions from both parties and reviewing the orders of lower authorities, the Tribunal found that the CIT(E) had not provided any finding that the company's objects were not charitable or its activities were not genuine. The Tribunal cited legal precedents to emphasize that the scope of enquiry for granting registration u/s.12AA was limited to ensuring the charitable nature of the trust's objects and the genuineness of its activities. As the CIT(E) had not made any adverse findings regarding the company's objects or activities, the Tribunal concluded that the refusal to grant registration u/s.12AA was unjustified. Therefore, the Tribunal set aside the order of the CIT(E) and directed the granting of registration u/s.12AA and approval u/s.80G to the assessee company. In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing that the refusal to grant registration u/s.12AA was not justified as the CIT(E) had not provided any valid reasons to support the denial. The Tribunal directed the CIT(E) to grant registration u/s.12AA and approval u/s.80G to the assessee company.
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