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2024 (9) TMI 194 - AT - Income TaxCancelling the registration u/s.12AB(1)(b)(ii)(B) - Considering the amendment of the Trust deed as change of objects - amended trust deed, which had not been intimated to the department within 30 days from the date of amendment - HELD THAT - On perusal of both original and amended Trust deed of the Trust, it is observed that the assessee s objects in original trust deed were sufficiently wide and covered range of charitable activities and only minor changes were made in the amended deed, without affecting the substance and spirit of the original deed. Therefore, there is no need for the assessee trust to file an application for re-registration, on account of such amendment made in the objects and hence we do not countenance the action of the ld. CIT (E) in rejecting the registration application of the assessee. CIT(E) has erred in his decision by cancelling the registration without finding any deviation in the trust activities or whispering any comment on the genuineness of the activities of the trust, as required in the provisions of section 12AB(1)(b) Considering the facts and circumstances of the case and the assessee s reliance on the decision of CIT(E) Vs. Paramount charity Trust, 2019 (4) TMI 379 - SC ORDER wherein it is clearly held that Non communication of the amendment in the trust deed was a mere irregularity and would not be a ground for cancellation of registration already granted , we are quashing the impugned order of the ld. CIT(E) and allow the appeal of the assessee by directing the ld. CIT(E) to grant the registration to the trust.
Issues:
1. Rejection and cancellation of registration of a charitable trust under Section 12AB(1)(b)(ii)(B) by the Commissioner of Income Tax (Exemptions). Detailed Analysis: Issue 1: Rejection and Cancellation of Registration The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Exemptions) rejecting and canceling the registration of the assessee under Section 12AB(1)(b)(ii)(B). The assessee, a charitable trust, applied for registration under Section 12AB of the Act by filing an online application in form No.10AB. The Commissioner noted that the trust deed had been amended, and the trust did not obtain re-registration within the specified period as per the conditions mentioned in the registration certificate. The Commissioner rejected and canceled the registration based on the amendment to the trust deed, which was not intimated to the department within the required timeframe. Issue 2: Grounds of Appeal The sole ground of appeal by the assessee was that the Commissioner erred in passing the order under Section 12AB(1)(b)(ii)(B) by rejecting the approval and canceling the registration of the assessee. The assessee contended that the amendments made to the trust deed were to enhance the effectiveness in implementing the existing objects of the Trust without changing any of the objects per se. The assessee argued that the changes made were minor and did not affect the substance and spirit of the original deed. Issue 3: Legal Provisions The legal provision of Section 12AB(1)(b) empowers the Principal Commissioner or the Commissioner of Income Tax to call for necessary documents to satisfy themselves about the genuineness of activities of the trust or institution. The provision allows for inquiries to be made to ensure the objects of the trust or institution and the genuineness of its activities. The Commissioner erred in canceling the registration without finding any deviation in the trust activities or commenting on the genuineness of the activities, as required by the provisions of Section 12AB(1)(b) of the Act. Conclusion After considering the facts and the reliance on a precedent case, the Tribunal quashed the impugned order of the Commissioner and allowed the appeal of the assessee. The Tribunal directed the Commissioner to grant registration to the trust, stating that non-communication of the amendment in the trust deed was a mere irregularity and not a ground for cancellation of registration. The appeal filed by the assessee was allowed for statistical purposes, and the order was pronounced in the open court on 3rd July 2024 at Chennai.
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