2020 (10) TMI 872 - AT - Income Tax

Exemption u/s 11 - rejecting the application for registration u/s 12A - applicant has merely submitted the MOA and no material has been provided that could throw light on the activities, if any, carried out by the applicant, as claimed in the trust deed - HELD THAT - Submission of the assessee was that the assessee furnished the copies of balance sheet for the year ended on 31/3/2019, the details of tuition fees received, from the assessment year 2019-20, bank statement with Punjab National Bank for the financial year ended on 31/3/2019, the details of students in Mission Nursing School and the copies of receipt books for assessment year 2018-19 and 2019-20, before the ld. CIT(A). We, therefore, set aside the order of the ld. CIT (E) and restore the matter to his file with a direction to decide the issue afresh - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Appeal against rejection of registration under section 12A of the Income Tax Act, 1961.

Analysis:
The assessee appealed against the order of the ld. CIT (Exemption), Lucknow, dated 16/5/2019, which rejected the application for registration under section 12A of the Income Tax Act, 1961. The ld. CIT (Exemptions) observed that the applicant had only submitted the MOA without providing any material shedding light on the activities claimed in the trust deed. The assessee, a company registered under section 8(5) of the Companies Act, 2013, running an institute named 'M/s. Mission Nursing School', argued that it is engaged in charitable activities. The assessee submitted various documents including balance sheets, tuition fee details, bank statements, student information, and receipt books to support its claim. The tribunal noted the submissions made by the assessee and set aside the order of the ld. CIT (E), directing a fresh decision on the registration application with a reasonable opportunity for the assessee to be heard.

The tribunal found that the ld. CIT (Exemptions) had rejected the application based on the lack of material beyond the MOA to verify the activities of the applicant. However, the documents submitted by the assessee, including balance sheets, tuition fee details, bank statements, student information, and receipt books, provided substantial evidence of the charitable activities being carried out. The tribunal emphasized the importance of considering all relevant documents and information before making a decision on registration under section 12A. Consequently, the tribunal set aside the ld. CIT (E)'s order and remanded the matter for a fresh decision, emphasizing the need for a fair hearing for the assessee.

For statistical purposes, the appeal of the assessee was treated as allowed, indicating a favorable outcome for the assessee in challenging the rejection of registration under section 12A. The tribunal's decision highlighted the significance of providing comprehensive documentation to support claims of charitable activities when seeking registration under the Income Tax Act, ensuring a fair assessment process for such applications.