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TMI Blog2020 (1) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax (Exemptions), Chandigarh has erred in requiring the appellant to produce a provi sional balance-sheet for the financial year 2018-19 as against the provisional balance-sheet submitted by the appellant even before the end of the above stated period and thus requiring the appellant to comply with an impossibility as per his findings in para 7 on page 6 of his order. 3. That the learned Commissioner of Income-tax (Exemptions), Chandigarh has erred in alleging that the appropriate replies to the queries raised by him have not been submitted by the appellant as per his findings in para 7 on page 6 of his order. 4. That the learned Commissioner of Income-tax (Exemptions), Chandigarh has erred in presuming that the purpose of creating the appellant-company was to meet the corporate social responsibility objectives of the parent company M/s. Roundglass Wellbeing Private Limited as per his allegations in the point 7(1) on page 6 of his order. 5. That the learned Commissioner of Income-tax (Exemptions), Chandigarh has erred in concluding that the appellant-company has been formed to have a close arrangement whereby a corporate entity is able to redeem its corporate social resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose, (ii) companies for the project or social cause where a part of the funds so raised goes to charity and (iii) individuals for their personal emergencies, including but not limited to healthcare and education related emergencies. 4. The learned Commissioner of Income-tax (Exemptions) to verify the genuineness of the activities of the company called for various information and record. The learned Commissioner of Income-tax (Exemptions) after appraisal of the records submitted by the assessee-company observed that the assessee-company namely M/s. Roundglass Foundation was, in fact, is a corporate social responsibility (CSR) arm of another company M/s. Round Glass Wellbing Private Limited. He further observed that M/s. Round Glass Wellbing Private Limited was one of the main members of the appellant-company and further that the main contributions have been provided by the said M/s. Round Glass Wellbing Private Limited to the appellant-company. That the share capital in totality had been contributed by pre-dominant stake holder. The learned Commissioner of Income-tax (Exemptions), therefore, observed that the applicant institution was working solely on the funds provided by its ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of a public charitable company. The application in the above case for registration under section 12A is hereby rejected." 5. Being aggrieved by the said order of the Commissioner of Income-tax (Exemptions), the appellant-company has preferred an appeal before us. 6. A perusal of the impugned order of the learned Commissioner of Income-tax (Exemptions) reveals that the learned Commissioner of Income-tax (Exemptions) nowhere in the impugned order has pointed out that the appellant-company has not been acting as per its objectives or that the activity of the appellant-company was not genuine vis-a-vis its objects. The main plea taken by the learned Commissioner of Income-tax (Exemptions) is that the said company is an arm of another company namely M/s. Round Glass Wellbing Private Limited for the purpose of carrying out their corporate social responsibility liability. That otherwise the main control over the appellant-company is of M/s. Round Glass Wellbing Private Limited. However, there is no allegation or observation by the learned Commissioner of Income-tax (Exemptions) about the charitable nature of its objects and activities thereof. So far as the grant of registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y apart from the corporate social responsibility activities, the activities in the nature of eradicating hunger and poverty, promotion of education, promoting gender equality, etc., are also provided. These activities are in the nature of public charity. Further, the corporate social responsibility activities itself are in the nature of public charitable activities. As regards the reasons (iv) given by the Commissioner of Income-tax (Exemptions), no activities in sync with the requirement of the Companies Act has taken place in the trust so far. For the purpose of granting registration under section 12AA only two factors are to be seen by the Commissioner of Income-tax (Exemptions) which are the objects of the trust being charitable in nature and the genuineness of activities. There is no requirement to see where the activities are in sync with the Companies Act or not. Reasons (v) given by the Commissioner of Income-tax (Exemptions) that the activities so far further show that the trust is relinquished its function as the primary implementation agency and undertaking its own programmes to impact direct beneficiary by transferring its funds to other society. Even the funds given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5)(vi) of the Income-tax Act, 1961 are set aside. We direct the Commissioner of Income-tax to grant the registration under section 12AA of the Act and also the approval under section 80G(5)(vi) of the Act to the assessee. 10. In result, both the appeals of the assessee are allowed." 7. Identical issue has been further decided by another co-ordinate Delhi Bench of the Tribunal in favour of the assessee-trust in the case of Escorts Skill Development v. CIT (E) in I. T. A. Nos. 527 and 528/Delhi/2017 vide order dated April 26, 2019. 8. The learned Departmental representative has not brought to our knowledge any distinguishing fact or case law contrary to the findings given in the above referred to the decisions of the co-ordinate Benches of the Tribunal. Hence, respectfully following the same and for the sake of consistency, this issue is decided in favour of the assessee. The impugned order of the Commissioner of Income-tax (Exemptions) is, therefore, set aside and the learned Commissioner of Income-tax (Exemptions) is directed to grant exemption under section 12A of the Act to the assessee-company. 9. In the result, the appeal of the assessee stands allowed. 10. Order pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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