2023 (4) TMI 92 - AT - Income Tax

Exemption u/s 11 - denying Registration u/s 12AA - charitable activity u/s 2(15) - trust is created for the benefit of a particular community namely Amreli Modh Vanik - CIT(E) that is not satisfied with the genuineness of the activities of the trust - HELD THAT - The assessee has not produced before us copies of the activities carried out by the assessee Trust, there is nothing on record before us that the activities carried out by the trust is open to Amreli Modh Vanik other than common public. In the absence of any details by the assessee before the Lower Authorities as well as before us to prove that the objects of the Trust is for General Public, and hit by section 13(1)(b) of the Act. No hesitation in confirming the order passed by Ld. CIT(E) denying registration under section 12AA - CIT(E) denied the benefit of registration u/s 12AA of the Act, which is legally justifiable and does not require any interference by the Tribunal. In the result, the grounds raised by the assessee are found devoid of merits and the same is hereby rejected. Appeal filed by the Assessee is dismissed.

Summary

Issues Involved:
The judgment involves the denial of registration under section 12AA of the Income Tax Act, 1961 to a Trust based on the objects of the trust and the genuineness of its activities.

Issue 1: Registration under Section 12AA denied by CIT(E)
The Assessee filed for registration under section 12AA of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption) denied registration based on the trust's activities and objects. The trust was found to be created for the benefit of a particular community, "Amreli Modh Vanik," and not for the general public. The Ld. CIT(E) held that the trust did not satisfy the conditions for registration under Section 12AA as it did not endure for the benefit of the public, invoking Section 13(1)(b) of the Act. The applicant failed to provide documentary evidence to prove the genuineness of its activities, as required by law.

Issue 2: Grounds of Appeal by the Assessee
The Assessee raised several grounds of appeal against the denial of registration under Section 12AA. The grounds included contentions that the CIT erred in rejecting the application on irrelevant grounds, not appreciating the legal and statutory position, and not providing adequate opportunity for the Assessee to present its case. The Assessee cited legal precedents to support its argument that registration should not be denied without proper inquiry and evidence against the trust.

Issue 3: Tribunal's Decision
Upon careful consideration of the materials on record, the Tribunal found that the Assessee did not provide evidence that the trust's activities were open to the general public, as required for registration under Section 12AA. The Tribunal confirmed the CIT(E)'s decision to deny registration under Section 12AA, citing the provisions of Section 13(1)(b) of the Act. The Tribunal concluded that the denial of registration was legally justifiable and dismissed the appeal filed by the Assessee.