2023 (6) TMI 1068 - AT - Income Tax

Denial of Registration u/s. 12AB - Assessee claimed that it has furnished all the details - CIT(E) noted that assessee did not furnish proper evidence in support of its reply and whatever was furnished was cryptic, inadequate and non-verifiable - HELD THAT - The prescription of section 12AB(1)(b)(i) is that where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or subclause (v) of the said clause, CIT(E) may call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about - (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects. Having seen all the documents furnished by the assessee as called for by him, CIT(E) failed to point out anything adverse either against the genuineness of the activities of the trust or the compliance of other laws. In our considered opinion, when the Trust Deed was there before the CIT(E) and the assessee furnished all the necessary details of the activities carried out up to the stipulated date, there was no reason for the ld. CIT(E) to deny the benefit of registration u/s. 12AB without specifically pointing out the nonfulfillment of the requisite condition(s) for the grant of registration. We, therefore, overturn the impugned order and direct to grant the registration u/s. 12AB of the Act. The facts and circumstances for the other appeal in respect of rejection of approval u/s. 80G(5) are mutatis mutandis similar. CIT(E) has given the same reasons for denial of approval u/s. 80G(5) as were given in his order rejecting the grant of registration u/s. 12AB. Appeal against registration u/s. 12AB, we overturn the impugned order and direct to grant approval u/s. 80G of the Act. Appeal of assessee allowed.

Summary

Issues involved:
The denial of Registration u/s. 12AB of the Income-tax Act, 1961 and the denial of approval u/s. 80G.

Registration u/s. 12AB:
The assessee, established by Trust Deed, applied for provisional registration which was granted. Subsequently, the final registration was sought but was denied by the CIT(E) due to inadequate evidence. The Tribunal noted that necessary details were furnished by the assessee in response to notices, including activities such as teaching spirituality, donating food, books, and providing for the needy. Despite provisional registration, the CIT(E) denied registration citing non-compliance with section 12AB(1)(b)(i) without pointing out any specific shortcomings. The Tribunal overturned the decision, emphasizing that all required information was provided, and directed to grant registration u/s. 12AB.

Approval u/s. 80G:
The circumstances for the appeal regarding rejection of approval u/s. 80G(5) mirrored those of the registration issue. The CIT(E) cited similar reasons for denial as in the registration case. Following the decision on the registration appeal, the Tribunal directed to grant approval u/s. 80G of the Act.

Both appeals were allowed, and the orders were pronounced in the Open Court on 22nd June, 2023.