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TMI Blog2017 (6) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Director of Income Tax (Exemption) has erred both on facts and in law in rejecting the application of the assessee for registration under Section 12A of the Income Tax Act, 1961." 2. The brief facts of the case as are emanating from the order of learned DIT(E) vide order dated 17.12.2013 which is reproduced for the sake of convenience as under: "The applicant filed an application on 27.06.2013 in Form No.10A seeking registration u/s.12A of the Income Tax Act, 1961. Subsequently, letter/notice u/s.12A of the Act, 1961 dated 02.08.2013 was issued to the applicant requiring it 2 to submit certain requisite documents/explanations on 12.08.2013 in support of its claim for registration u/s.12A of the IT Act. 2. However, on given date i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by a trust or institution by way of applicant of income in India towards religious or charitable purposes, as per its memorandum, is deductible from the income. The assessee may also set apart and accumulate 15% of income for such application and such amount will also be taken as expenditure of the year. These provisions are applicable mutatis-mutandis to a partly religious or charitable trust. This section also permits deduction of expenditure incurred outside India, provided that such application of income promotes international welfare in which India is interested. However, for deduction of such expenditure, prior approval of the Board is required. In conformity with section 12, corpus donations constitute deductible expenditure under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in India." Section 12A registration is for the purpose of section 11(1) exemption. Therefore such institutions, which apply its income outside India/carries out activities outside India, do not fall under the purview of section 12A and thus are not eligible for registration u/s.12A of the IT Act, 1961. 3.2 Further, the applicant has referred to Taxpayers booklet which mentions about exemption with regard to application of income outside India. The relevant provision is as per section 11(1)(c), which reads as under: Income derived from property held under trust- (i) Created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment and no material has been brought on record to show why such amendment is required. It was further argued that there was no requirement for going into Section 11 which has been discussed by the learned DIT(E) at length. There is no dispute to the fact that the operations outside India are referred into main objects of the Institutions but no activities in this regard in any of the foreign country has been carried out till the end of the impugned year. The assessee is well aware of the provisions when he has to carry out the activities abroad, he has to take the permission of the Board. Since no such activity has been carried out and therefore there is no requirement of the approval of the Board. The final accounts of various years al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this behalf after satisfying himself about the objects of the trust or institution on the genuineness of his activities. In this regard as mentioned hereinbefore the objects of the trust are there to carry out the activities outside India but no activity as such has been carried out, and therefore, no approval of the Board is required to be taken from the Board. There is no necessity to make the amendment of the main objects. Also none of the activities has been brought to our notice by the learned DR and no material placed before us to show that any expenditure outside India has been incurred by the assessee or any activity outside India has been carried out. In such circumstances and facts of the case, the learned DIT(E) is not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction or order of the Board for application of income as aforesaid outside India. Reading the order dated 24.02.2004, it is very clear that there is non application of mind. It was necessary for the Commissioner to examine the purpose for satisfying himself that the activities are genuine. It was open for him to make necessary enquiries in this behalf and to pass an order as per the procedure laid down under section 12AA of the said Act. So far as income which is applied outside India is concerned, is not a relevant criteria for rejecting the application. In absence of order under section 11(1)(a)(c), one cannot seek benefit for application of income for charitable or religious purposes outside India. Therefore, the order dated 24.2.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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