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TMI Blog2020 (1) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT (E) at the time of passing the impugned order. The purpose and requirement of accompanying the order granting registration under section 12AA is to make available such order for verification and consideration of the competent authority at the time of considering the application for grant of approval under section 80G(5). Hence once the order of granting registration under section 12AA was already with the learned CIT (E), then the condition provided under rule 11AA is satisfied. Merely because the assessee could not undertake much activity within the short span of time, the ld. CIT (E) should not have refused the claim of approval under section 80G(5) of the Act. When there is no adverse fact found against the assessee and the assessee has claimed to have already started the activity, the matter is required to be considered afresh by the ld. CIT (E) after verification of the activities carried out by the assessee. Hence the matter is set aside to the record of the ld. CIT (E) for passing a fresh order in the light of the above observation. - Appeal of assessee allowed for statistical purposes. - ITA No. 1212/JP/2018 - - - Dated:- 30-7-2019 - Ramesh C. Sharma, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l dated 06-12-2017 in case of Mattapali Chalmayya Charitable Trust v. CIT (E) in [IT Appeal No. 234 (Vizag) of 2017, and submitted that the Tribunal held that if the activities of the assessee trust are genuine at the stage of commencement of the institution, registration has to be granted and approval under section 80G of the Act can be followed with grant of registration. He has also relied upon the decision of the Coordinate Bench of this Tribunal dated 11-1-2017 in case of Keshar Devi Godara Samajik Kalyan Sansthan Singor v. CIT (Exemptions) in [IT Appeal No. 877 (JP) of 2016, and submitted that once the registration under section 12AA is granted, the approval under section 80G(5) is consequential in the absence of any contrary material or fact showing not fulfilling the conditions provided under section 80G(5) of the IT Act. The ld. Counsel has also stated at bar that now the assessee has already started its activity as per the objects and, therefore, approval under section 80G(5) should be granted. 4. On the other hand, the ld. D/R has submitted that the basic condition of section 80G(5) is not fulfilled as the assessee has not started any activity at the time of fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Smt. Kanta Devi Katta got seriously ill and got hospitalized, further the trust could not registered by your honour and not got 80-G Certificate so effective activities could not be started now we assures to do activities as per objects of the Trust. 5. As discussed above, no significant activity has been started by the applicant as per the objects. Thus, the basic condition u/s 80G is not fulfilled. Considering this, the case is not fit for granting exemption u/s 80G at this stage. Thus it is clear that the ld. CIT (Exemptions) has not doubted the charitable nature of the objects of the assessee trust but since no significant activity has been started by the assessee, it was held that the condition under section 80G(5) is not fulfilled. It is pertinent to note that if there is a substantial gap between the registration under section 12AA and the application for approval under section 80G, then the mere grant of registration under section 12AA will not automatically create a right of getting approval under section 80G(5) of the Act but the ld. CIT (Exemptions) has to see whether the activity of the Trust has been carried out as per objects and for achieving t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was already with the learned CIT (E), then the condition provided under rule 11AA is satisfied. As regards the decision relied upon by the learned D/R in the case of Kirti Chand Tarawati Ch. Trust (supra), in the said case the Commissioner conducted a spot enquiry and was found that the Trust being engaged mainly in the construction of religious temple wherein no charitable activity was being carried on. Thus it was a finding of fact that the activities of the assessee were not carried out for any charitable work. In the case in hand, no such allegation has been made by the ld. CIT (E) that assessee has carried out any activity which is not charitable in nature but the only objection is that the assessee has not started any significant activity. The Visakhapatnam Bench of the Tribunal in case of Mattapali Chalmayya Charitable Trust (supra) has considered an identical issue in para 5 as under :- 5. We have carefully considered the rival submissions and perused the records. The decision of the ITAT, Lucknow bench is not applicable to the case on hand since, in the aforementioned case, the claim of the assessee was rejected by the Tribunal on the ground that for grant of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 679/JP/2015 under the identical facts has observed as under :- 2.10. Further, we have gone through the decision of decision of Coordinate Bench in case of Pearls Educational Institute (supra). The said decision was rendered in the context of renewal of approval under section 80G and the fact that the appellant in that case had not commenced construction activities even after 13 years which is distinguishable on facts as stated above. In our view, the said decision doesn't support the case of the Revenue. In fact, the Hon'ble Allahabad High Court in case of Hardayal Charitable and Educational Trust v. CIT (supra) is directly on the issue and supports our view. In that case, assessee trust applied for grant of registration u/s 12AA and approval u/s 80G(5). The CIT refused to grant registration and approval on grounds that trust was in process of construction of college for studies and that huge amount was spent on advertisement and promotion of business of its family concern. In subsequent assessment year, registration u/s 12AA and approval 80G was granted with conditions that exemption certificate would be effective from A.Y. 2012-13. It was held that: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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