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TMI Blog2019 (5) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in rejecting the application u/s 80G without looking at the merits of the matter and merely rejecting the application on the ground that the application for registration u/s 12A has been rejected." "ITA NO.528/DEL/2017 1. That the learned CIT(Exemptions) erred in rejecting the application for registration u/s 12A of the Income-tax Act, 1961 merely on assumptions, presumptions and apprehensions, without appreciating the factual, legal and statutory position for grant of registration. 2. That the learned CIT(Exemptions) failed to appreciate that activities of the appellant, inter alia, include the main activity of 'providing vocational training' in various fields under the skill development programme of Government of India to create skilled manpower in the country and is covered under both 'education', & 'advancement of any other object of general public utility' as provided in Section 2(15) of Income Tax Act. 3. That the learned CIT(Exemptions) erred in rejecting the application u/s 12A on the ground that the appellant company has been formed specifically to carry out the CSR obligations of the parent company. He failed to appreciate that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t after being satisfied that the same has been constituted with charitable objects etc. It is also not in dispute that vide reply dated 07.12.2016, applicant produced before the ld. CIT (E) audited finance for the period ending 31.03.2016, receipt and payment account for the financial year 2015-16, copy of agreement dated 09.11.2016 executed with the National Skill Development Corporation, acknowledge of Income-tax return for AY 2015-16 & 2016-17 along with computation of income and copies of bank statement since its inception. It is also not in dispute that the applicant company is a part and parcel of Escorts Limited who is main member of the applicant company. It is also not in dispute that the corpus fund in totality has been contributed by the predominant stakeholders. It is also not in dispute that the Director of the applicant company, Shri G.B. Mathur is also on the Board of Directors of Escorts Limited. It is also not in dispute that the applicant company is working solely with the funds provided by its main contributor, M/s. Escorts Ltd. while fulfilling their CSR obligation. 7. Before proceeding further, we would like to examine aims and objects of the applicant compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikely to fulfill the objectives of this Company. (iii) To receive grants, gifts, loans, subscriptions, donations or any other financial contribution in cash and securities and of any property, either moveable of immovable: within the country or/and abroad and, to vary, alter or transfer such investments from time to time. etc." 8. Bare perusal of the impugned order passed by the ld. CIT (E) goes to prove that registration and approval u/s 12AA and 80G of the Act has been declined on the grounds inter alia that applicant company has been constituted as a captive company by the Escorts Limited in order to redeem their CSR obligation; that there is a close arrangement vide which corporate entity is not only able to redeem its CSR obligation but also at the same time able to control the finances of the applicant company; and that resultantly the money which would not have been otherwise deductible as expenditure is now being claimed exempt and that there is no rationale for seeking further exemption on the same activities being performed by the applicant company under CSR obligation. 9. In the backdrop of the aforesaid facts and circumstances of the case, the ld. AR for the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustry Corporation for imparting training on heavy equipment operators for which they have trained and certified about 30 trainees as Backhoe loader and PNC crane operators who have been placed with its dealers. Applicant company is having candidate data base of about 1000 candidates. The Revenue has not brought on record iota of evidence to prove that the youths trained by the applicant company have not been employed elsewhere. Even otherwise, there cannot be any restrain on a trainee to get the placement as per his convenience. 13. Merely because of the fact that the applicant company has been established to comply with the CSR obligations, the registration u/s 12AA of the Act cannot be denied, particularly when CSR activities are also charitable activities as defined under the Act. 14. Coordinate Bench of the Tribunal in case cited as Processcum- Product Development Centre vs. Addl. CIT - (2019) 103 taxmann.com 191 (Delhi-Trib.) held that :- "Where assessee was conducting various skill training programs for students to get placement activities would fall within definition of education under section 2(15), thus entitling it for exemption under section 10(23C)(iiiab)." 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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