9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 1123 - AT - Income TaxExemption u/s 11 - denying the registration u/s 12AA - CIT-E had denied the registration solely on the ground that the appellant had not undertaken any charitable activities pursuant to objects on which it was set up activities of the trust in the last three financial years - HELD THAT - It is not the case of the CIT(Exemption) that the objects of the appellant society are not charitable in nature. The reasoning of the CIT (Exemption) is not tenable under the law in view of the recent judgement of the Hon ble Supreme Court in the case of Ananda Social and Educational Trust 2020 (2) TMI 1293 - SUPREME COURT Hon ble Supreme Court in the case of M/s. Ananda Social and Educational Trust 2020 (2) TMI 1293 - SUPREME COURT held that merely because the trust has not spent any amount of its income for charitable activities and the fact that the trust has not spent any amount of income for charitable purpose does not amount to carrying on the activities contrary to its objects. In the light of legal position discussed supra, the order of the ld. Commissioner of Income Tax (Exemption) cannot be sustained in the eyes of law. The submission of the ld. CIT-DR the matter be remanded to Commissioner of Income Tax (Exemption) for fresh examination cannot be acceded to for the reason that it amounts to ordering fresh enquiry which is not permissible under the law - we direct the ld. Commissioner of Income Tax (Exemption) to grant registration of the appellant trust u/s 12AA of the Act. - Decided in favour of assessee.
Issues:
- Denial of registration u/s 12AA of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption) based on lack of charitable activities. - Adverse inference drawn against the appellant without proper opportunity of being heard. - Interpretation of the genuineness of charitable activities and objects of the trust. - Application of recent judgments, including the case of Ananda Social and Educational Trust vs. CIT. Analysis: The appeal pertains to the denial of registration u/s 12AA of the Act by the Commissioner of Income Tax (Exemption) due to the lack of charitable activities conducted by the trust in the last three financial years. The appellant contended that the denial was unjust as they were not given a proper opportunity to present their case. The appellant argued that the denial was not in line with the law, citing the judgment of the Hon’ble Supreme Court in the case of Ananda Social and Educational Trust vs. CIT. The appellant trust, Dr. N T Ghatte Charitable Trust, was formed with specific charitable objects, including the establishment of educational institutions and support for students. The trust applied for registration under section 12AA of the Act, which was rejected by the Commissioner based on the lack of charitable activities in the past three years. The Commissioner's decision was challenged on the grounds of procedural fairness and misinterpretation of the law regarding the genuineness of charitable activities. The Tribunal observed that the denial of registration solely based on the lack of charitable activities was not tenable under the law. Referring to the judgment in the Ananda Social and Educational Trust case, the Tribunal emphasized the need to assess the genuineness of the trust's objects and proposed activities rather than focusing solely on past activities. The Tribunal highlighted that the failure to spend income on charitable activities does not necessarily imply a deviation from the trust's objects. In light of the legal principles discussed and the precedents set by the Hon’ble Supreme Court, the Tribunal held that the denial of registration by the Commissioner was not valid. The Tribunal rejected the request for remand for fresh examination, stating that it would amount to ordering a new inquiry, which is impermissible under the law. Consequently, the Tribunal directed the Commissioner to grant registration to the appellant trust under section 12AA of the Act, allowing the appeal in favor of the assessee. This judgment underscores the importance of assessing the genuineness of charitable objects and proposed activities of a trust while considering registration under section 12AA of the Income Tax Act, emphasizing compliance with legal requirements and procedural fairness in such matters.
|
