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2020 (5) TMI 166 - AT - Income TaxExemption u/s 11 - grant of registration u/s. 12AA - Charitable activity u/s 2(15) - HELD THAT - The assessee has applied on 20.07.2017 for registration of AOP under the W. B. Societies Registration Act, 1961, the outcome of it must be in the knowledge of assessee, which may be shared with the CIT(E) and the Ld. CIT(E) to consider the application of assessee for exemption u/s.12A afresh as per the ratio laid down in LAXMINARAYAN MAHARAJ AND ANOTHER 1983 (9) TMI 50 - MADHYA PRADESH HIGH COURT and M/S AMBALA PUBLIC EDUCATIONAL SOCIETY, AMBALA 2018 (11) TMI 1178 - PUNJAB AND HARYANA HIGH COURT on the issue. Before we part, we would like to remind the Ld. CIT(E) that the Ld. CIT(E) s jurisdiction is to verify the objects of the assessee and the genuineness of the activities meaning thereby that he had to satisfy himself that the objectives of the Trust are charitable in nature and activities have been carried on or to be carried on are genuine, meaning thereby that they are in consonance for achieving of charitable objects and nothing else. We set aside the impugned order of Ld. CIT(E) and remand the application of the assessee back to the file of the Ld. CIT(E) for de novo consideration in the light of the aforesaid discussion. Appeal of assessee is allowed for statistical purposes.
Issues:
1. Rejection of registration u/s. 12AA of the Income-tax Act, 1961. 2. Non-registration under West Bengal Societies Registration Act, 1961. 3. Failure to produce the instrument of creation in original. 4. Lack of mention of the establishment date in the instrument of creation. Issue 1: Rejection of registration u/s. 12AA: The appeal was against the rejection of registration u/s. 12AA of the Income-tax Act, 1961 by the Ld. CIT(E). The Ld. CIT(E) pointed out that the application filed by the assessee was deficient as the instrument of creation was not registered under the West Bengal Societies Registration Act, 1961, and was not produced in original. The Ld. CIT(E) emphasized the importance of complying with Rule 17A of the Income-tax Rules, 1962, which requires the production of the instrument of creation in original. The Ld. CIT(E) found fault with the lack of documentary evidence to verify the establishment date claimed by the assessee, leading to the rejection of the registration application. Issue 2: Non-registration under West Bengal Societies Registration Act: The assessee, an AOP, had not registered itself under the West Bengal Societies Registration Act, 1961 at the time of applying for registration u/s. 12A of the Act. However, later developments showed that the assessee applied for registration under the Act and submitted the necessary documents. The Tribunal noted that the West Bengal Societies Registration Act does not specify a format for registration, and registration is done as per the stipulated sections. Referring to legal precedents, the Tribunal highlighted the need to produce constitutive and evidential documents for registration, depending on whether the trust was created under an instrument or otherwise. Issue 3: Failure to produce the instrument of creation in original: The Ld. CIT(E) raised concerns about the failure to produce the instrument of creation in original as required by Rule 17A of the Income-tax Rules, 1962. However, the Tribunal observed that the last page of the Memorandum of Association clearly indicated the establishment date of the association as 22nd September, 2003, which contradicted the Ld. CIT(E)'s assertion. The Tribunal directed the assessee to produce the original document before the Ld. CIT(E. Issue 4: Lack of mention of the establishment date in the instrument of creation: Another point of contention was the absence of the establishment date of the assessee/organization in the instrument of creation. The Ld. CIT(E) highlighted this as a deficiency in the application. However, the Tribunal found that the establishment date was indeed mentioned in the Memorandum of Association, dated 22nd September, 2003, which was signed by the governing body members. The Tribunal acknowledged this discrepancy and directed the Ld. CIT(E) to reconsider the application in light of the legal principles discussed. In conclusion, the Tribunal allowed the appeal for statistical purposes, setting aside the Ld. CIT(E)'s order and remanding the application back for reevaluation. The judgment emphasized the importance of complying with legal requirements and producing necessary documents for registration under the Income-tax Act, 1961.
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