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TMI Blog2021 (8) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the ld. CIT (E) is not sustainable in the eyes of law. CIT(E) is not required to look into the activities at the stage of registration, which can be well taken care of by the AO during the assessment proceedings and at this stage, only genuineness of the objects has to be examined by the ld. CIT(E) which he has not disputed in this case. So, impugned order passed by the ld. CIT (E) is set aside. Consequently, the appeal filed by the assessee is allowed directing the ld. CIT (E) to accord registration u/s 12AA of the Act to the assessee. - ITA No.2352/Bang/2019 - - - Dated:- 11-8-2021 - Shri Anil Chaturvedi, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Shri P.C. Yadav, Advocate For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of rudimentary principles of contemporary jurisprudence. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee, Federation of Democratic Voice, being a company registered under section 8 of the Companies Act, 1956 engaged into the dissemination of its charitable activities moved an application dated 08.07.2017 for registration under section 12AA of the Income-tax Act, 1961 (for short the Act ) before the ld. CIT(E) . ld. CIT(E) has declined the registration sought for by the assessee u/s 12AA of the Act on two grounds : (i) since the applicant company has came into existence on 13.06.2017 it failed to carry out charitable activities during this period and except for recital of charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the services rendered by him. 6. When we examine the order passed by the ld. CIT (E) in the light of the undisputed facts narrated in preceding paras, we are of the considered view that registration u/s 12AA of the Act cannot be declined merely on the ground that the assessee company has not carried out any charitable activities particularly in the facts and circumstances of the case wherein assessee company has filed application for registration within one month of its incorporation because there is no such condition laid down under the Act to seek registration u/s 12A within the specified period of incorporation of section 8 company. 7. When ld. CIT (E) has not disputed the charitable objects of the assessee company declining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve received salary of ₹ 40,000/- per month and thereby invoked the provisions contained u/s 13(1)(c) 13 (3) of the Act. First of all, when assessee trust being a company registered u/s 8 of the Companies Act, 2013 is permitted to pay the prudent remuneration in good faith for the services rendered by a member, it is no ground to decline the registration. At the same time, this issue can be taken care of at the time of granting benefit, if any, u/s 11 of the Act during the assessment proceedings. 10. Hon ble Allahabad High Court in case of Hardayal Charitable and Education Trust vs. CIT 355 ITR 534 (All.) decided the identical issue in favour of the assessee by returning following findings :- The preponderance of the judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that it is not within the purview of Commissioner to examine whether the assessee was entitled to exemption u/s 11 or 12 since that was within the jurisdiction of AO and not the Commissioner (E). Hon ble High Court further held that, A body or institution which is functioning for advancement of objects of general public utility and whose activities are not in the nature of trade, business or commerce or sheer profit making, is entitled to claim itself to be constituted for charitable purposes and seek registration under section 12A(1) of the Income-tax Act, 1961. Charitable purpose primarily means that the predominant object must be to promote welfare of general public. An ancillary activity, if any, to that general one performed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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