2023 (4) TMI 1211 - AT - Income Tax

Exemption u/s 11 - denial of registration to applicant u/s 12AA - as argued such trust is engaged in activities, which are within the meaning of Charitable purpose , as defined u/s 2(15) - HELD THAT - We find that the said payment was related to the charitable activities of the trust. For registration u/s 12AA it is clearly stipulating that the CIT(E) shall satisfy himself about the objects and the genuineness of its activities. The assessee made the payments in relation to charitable activities of trust. The ld. DR had not made any strong objection related to submission of the assessee and the evidence which are filed before the bench. We set aside the order of the ld. CIT(E) and direct to allow the registration of the assessee. Appeal of assessee allowed.

Summary

Issues:
The judgment involves the denial of registration to the appellant u/s 12AA of the Income Tax Act, 1961, based on the CIT (E)'s order dated 29.08.2019.

Issue 1: Denial of Registration u/s 12AA:
The appellant, a charitable trust, applied for registration u/s 12AA, which was denied by the CIT (E) on grounds related to payments made by the trust. The dispute arose regarding the substantiation of payments made to various parties in relation to trust activities. The appellant contested the denial, arguing that the payments were made for charitable purposes, supported by detailed submissions and documents.

Issue 2: Appeal Proceedings and Arguments:
In the absence of the appellant during the hearing, written submissions were filed. The appellant's explanations for the payments were presented, including payments to entities like M/s Bharat Timber Store, M/s Jai Maa Enterprises & Platinum Health Care, and Shree Gau Sewa Society (Regd), among others. The appellant's submissions highlighted the charitable nature of the payments and provided supporting documentation.

Issue 3: Tribunal Decision and Rationale:
After considering the rival submissions and documents, the Tribunal found that the payments in question were indeed related to the charitable activities of the trust. Emphasizing the importance of satisfying the genuineness of activities for registration u/s 12AA, the Tribunal noted that the appellant had adequately demonstrated the charitable nature of the payments. Consequently, the Tribunal set aside the CIT (E)'s order and directed the registration of the appellant as a charitable trust.

Conclusion:
The Tribunal allowed the appeal of the appellant, granting registration u/s 12AA of the Income Tax Act, 1961. The decision was pronounced in open court on 26.04.2023.