2019 (7) TMI 662 - AT - Income Tax

Exemption u/s 11 - registration u/s 12AA rejected - alleged that assessee does not fulfill the requirement of law as mandated u/s 12AA - HELD THAT - Observation of the Ld. CIT(Exemption) that no other activities have been carried out is contrary to the material placed before us. As per the material placed, the assessee society has also conducted health camps. Further, it is submitted that the training programme conducted by the assessee is under Skill India scheme of the Central Government of India. CIT (Exemption) has not doubted the genuineness of the activities but he rejected the application merely on the basis that the courses so provided by the assessee society are not recognized by the Government. This reasoning of the Ld. CIT (Exemption) is not in accordance with the provisions of law. As per section 12AA, Ld. Principal CIT or CIT on receipt of an application for registration of a Trust or Institution would call for such documents or information from the Trust or Institution as he thinks necessary in order to satisfy himself about the genuineness of the activities of Trust or Institution. There is no suspicion casted upon the activities of the assessee society. Under these facts, the reasoning of the Ld. CIT is not sustainable - set aside the order of CIT and restore application to the file of the Ld. CIT to reconsider the same. Hence, the grounds raised are allowed for statistical purposes. Application for registration of Samiti u/s 80G rejected - HELD THAT - In this appeal also, the ground of the assessee s appeal is allowed for statistical purposes. Application for registration u/s 80G is restored to the file of the Ld. CIT (Exemption) to re-decide it. Ld. CIT is hereby directed to reconsider the same after disposing of the application, which has been restored for registration u/s 12AA.

Summary

Issues:
1. Rejection of application for registration under Section 12AA of the Income Tax Act, 1961.
2. Rejection of application for registration under Section 80G of the Income Tax Act, 1961.

Issue 1: Rejection of application for registration under Section 12AA of the Income Tax Act, 1961:
The appellant filed an appeal against the rejection of its application for registration under Section 12AA of the Income Tax Act, 1961. The appellant contended that the rejection was erroneous as the activities conducted were charitable, and the authorities did not doubt their genuineness. The appellant argued that even if the courses provided were not recognized by the Government, it should not be a basis for rejection. The Departmental Representative opposed, stating that there was no material proving recognition by any regulatory authority. The Tribunal found that the rejection was solely based on the courses not being recognized by the Government, which was not a valid reason under the law. The Tribunal set aside the order of the CIT and directed reconsideration, emphasizing the need to provide material related to the activities for registration under Skill India and other activities for benefits under Sections 11 & 12 of the Act.

Issue 2: Rejection of application for registration under Section 80G of the Income Tax Act, 1961:
The appellant also appealed against the rejection of its application for registration under Section 80G of the Income Tax Act, 1961, which was linked to the rejection under Section 12AA. The Tribunal, having set aside the earlier rejection for reconsideration, allowed this appeal for statistical purposes as well. The application for registration under Section 80G was restored to the CIT for reevaluation after the decision on the Section 12AA application. The Tribunal directed the CIT to reconsider the Section 80G application after dealing with the Section 12AA application. Consequently, both appeals by the appellant were allowed for statistical purposes, and the orders were pronounced accordingly.