2021 (4) TMI 96 - AT - Income Tax

Application seeking approval u/s 80G - assessee has been granted approval u/s 12A - HELD THAT -It is seen that the assessee continues to enjoy registration u/s 12A of the Act and, therefore, their appears to be no apparent reason for which the assessee s request for recognition u/s 80G of the Act was denied. In our considered opinion, interest of substantial justice would be served, if the Ld. CIT(E) re-considers the assessee s application. Accordingly, we restore this file to the office of Ld. CIT(E) with a direction to consider the application of the assessee keeping in mind that the assessee enjoys registration u/s 12A of the Act after giving proper opportunity to the assessee to present its case. Appeal of the assessee stands allowed for statistical purposes.

Summary

Issues:
1. Rejection of application seeking approval u/s 80G of the Income Tax Act, 1961.

Analysis:
The appeal was filed against the order rejecting the assessee's application for approval under section 80G of the Income Tax Act, 1961. The assessee had already been granted approval under section 12A of the Act. The rejection was based on the grounds that the activities of the assessee trust did not qualify as "relief to the poor," which was the basis for the 12A recognition. The assessee contended that its activities fell within the charitable purpose as defined under the Act and fulfilled all conditions for approval under section 80G. The assessee argued that there was no justification for the CIT(Exemptions) to scrutinize its objects or activities, especially since they had already been deemed charitable at the time of registration under section 12AA of the Act.

The Authorized Representative (AR) representing the assessee argued that the rejection lacked a cogent reason, especially considering the assessee's existing registration under section 12A. On the contrary, the Senior Departmental Representative (DR) supported the CIT(Exemptions)'s decision. After hearing both parties and reviewing the records, the Tribunal found that since the assessee was already registered under section 12A, there was no apparent reason for denying the request for recognition under section 80G. The Tribunal concluded that substantial justice would be served by directing the CIT(Exemptions) to reconsider the application, ensuring the assessee had a fair opportunity to present its case.

As a result, the Tribunal allowed the appeal for statistical purposes, restoring the file to the CIT(Exemptions) for a re-consideration of the assessee's application for approval under section 80G. The decision was pronounced in the Open Court on 03/03/2021.