2019 (8) TMI 113 - HC - Income Tax

Registration/approval u/s 12AA/80G - rejected on ground that Trustees of the Respondent have vide power which could be utilized for attainment of the personal benefits of the Trustees or even be commercial in nature - ITAT after examining the issue on merit in details set aside the order of the CIT (E) and directed the grant of registration u/s 12AA as well as approval u/s 80G - ITAT even noted that the CIT (E) had not concluded that the Trust activities were not genuine - HELD THAT - Learned Senior Standing Counsel for the Revenue, urged that even if the order of the CIT (E) was found unsustainable since it failed to discuss the merits of the application filed by the Respondent, the ITAT ought to have remanded the matter back to the CIT (E) for a fresh determination. The Court finds that the ITAT has taken pains to examine the merits itself and since the facts spoke for themselves, there was no need to again send the matter back to the CIT (E) for a fresh determination. The Court is therefore unable to find any legal infirmity in the impugned order of the ITAT. No substantial question of law arises

Summary

Issues:
- Registration under Section 12AA and approval under Section 80G of the Income Tax Act, 1961

Analysis:
The High Court heard an appeal by the Revenue challenging the ITAT's order setting aside the CIT(E)'s decision to decline registration under Section 12AA and approval under Section 80G of the Income Tax Act, 1961. The main issue was whether the Trust's activities were genuine and whether the Trustees' powers were utilized for personal benefits, including commercial purposes. The CIT(E) had rejected the registration application citing unsatisfactory details provided by the Respondent. However, the ITAT examined the Trust Deed clauses, Trust's main objects, and activities in detail. It found that the Trust was established for charitable purposes like rehabilitating slum and street children, setting up orphanages, providing education to weaker sections, rehabilitating handicapped persons, and granting scholarships. The ITAT concluded that the Trust was created for a just and charitable purpose based on the evidence provided by the Respondent, including details of activities, bank statements, accounts, expenses, and donors' list.

The ITAT disagreed with the CIT(E)'s decision and held that declining registration solely based on the Trustees' wide powers was improper. It directed the grant of registration under Section 12AA and approval under Section 80G to the Respondent. The Revenue's counsel argued that the ITAT should have remanded the matter back to the CIT(E) for a fresh determination. However, the High Court found that the ITAT had thoroughly examined the merits, and there was no need for a fresh determination. The Court upheld the ITAT's decision, stating that no legal infirmity was found in the order, and no substantial question of law arose. Consequently, the appeal was dismissed with no costs incurred.