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TMI Blog2022 (1) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... ally in the instant case where though the assessee company has been in existence for quite some time and is clearly not a newly registered company but at the same time, since no activities are carried on by it since its inception as so claimed by it, it can still apply for registration. However, in this case, where the assessee company is in existence for more than a decade, the ld CIT(E) is well within his jurisdiction to examine such claim of no-activity by the assessee company and where it is found that some activities were actually been carried on by the assessee company, he is bound to record his satisfaction as to whether the activities so carried on are genuine and in accordance with its stated objectives or not. Secondly, the ld CIT(E) is well within his jurisdiction u/s 12AA(1)(a)(ii) to examine whether the assessee company is compliant under the extant laws as applicable and whether there are any changes in the memorandum and articles of association, the objects clause and constitution etc. since its incorporation and at the time of seeking registration. And thirdly, what are the proposed activities of the assessee company and whether they are genuine in the sense that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2021 till further orders. It was accordingly submitted that the delay so happened in filing the present appeal was beyond the control of the assessee and the same may be condoned and appeals of the assessee may be heard on merits. 3. Per contra, ld. Pr.CIT/DR did not raise any specific objection and fairly submitted that the explanation so furnished by the ld. AR regarding delay in filing the present appeal on account of COVID-19 pandemic may be considered by the Bench as it deems fit and appropriate. 4. After hearing both the parties and considering the material on record, we find that there was a reasonable cause for delay in filing the present appeals due to COVID-19 pandemic and lockdown imposed in the state of Rajasthan which was beyond the control of the assessee. Therefore, the delay so happened is hereby condoned and both the appeals so filed by the assessee are hereby admitted for adjudication on merits. 5. On merits, the ld. AR submitted that the appellant is a company incorporated under the provisions of section 25 of the Companies Act, 1956. The main object of the appellant company is to promote commerce, art, culture, social development, social upliftme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enying approval deserves to be quashed and he may be directed to grant approval as applied u/s 12AA as well as section 80G of the Act. 6. Per contra, the ld. Pr. CIT/DR in his submission taken us through the order of the ld CIT(E) and submitted that the ld CIT(E) while deciding on the application seeking registration u/s 12AA has to examine the objects of the assessee company and secondly, the genuineness of the charitable activities actually undertaken by it. It was submitted that being a limitation matter and inspite of giving sufficient opportunities, the appellant company failed to produce complete details and furnish explanation, therefore, the ld CIT(E) decided the application based on material available on record and held that the appellant company failed to establish genuineness of the charitable activities actually undertaken by it and accordingly, the application seeking registration u/s 12 AA was rightly rejected by him. 7. It was further submitted that merely because the assessee company has been registered u/s 25 of the Companies Act, the same by default does not necessarily mean that it shall be eligible for registration u/s 12AA of the Act. It was submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient opportunity and being a limitation matter, he decided basis material available on record and assessee company s application seeking registration u/s 12AA was rejected. 9. During the course of hearing, the ld. AR submitted that in response to the show cause dated 11.03.2021, the assessee company did submit its response vide letter dated 19th of March, 2021 and it is therefore, factually not correct that the assessee company has not submitted the requisite information and explanation as sought by the ld. CIT(E) rather he has failed to correctly appreciate the submissions so filed by the assessee company. The ld A/R further submitted that registered office of the assessee society is situated at premises owned by the Director of the assessee company and a copy of no objection certificate was duly submitted as part of the aforesaid submissions. 10. It was further submitted that there were no charitable activities which were undertaken by the assessee company since its inception and in view of the same, any evidence in support of such activities which have not been started at first place could not have been submitted. It was reiterated that what needs to be examined is wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two months. 8. No activities had been undertaken by the respondent Trust before the application was made. The Commissioner rejected the application on the sole ground that since no activities have been undertaken by the trust, it was not possible to register it, presumably because it was not possible to be satisfied about whether the activities of the trust are genuine. The Income-tax Appellate Tribunal, Delhi (for short, the 'Tribunal') reversed the orders of the Commissioner. The Revenue Department approached the High Court by way of filing an appeal. The High Court upheld the order of the Tribunal and came to the conclusion that in case of a newly registered trust even though there was no activities, it was possible to consider whether the trust can be registered under section 12AA of the Act. This judgment is assailed before us. 9. Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied in order to ensure that the object of the trust and its activities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court in the impugned judgment is correct and liable to be upheld. 14. Ms. Bhati, learned Senior Counsel for the appellant, fairly drew our attention to a judgment of the Allahabad High Court in titled as CIT v. R.S. Bajaj Society [2014] 42 taxmann.com 573/222 Taxman 111 (All.) which has taken the same view as that of the Delhi High Court in the impugned judgment. The Allahabad High Court has also referred to a similar view taken by the High Courts of Karnataka and Punjab Haryana. 15. Apparently, a contrary view has been taken by the Kerala High Court in the case of Self Employers Service Society v. CIT [2000] 113 Taxman 703/[2001] 247 ITR 18. That view however does not commend itself. However, the facts in Self Employers Service Society (supra) suggest that the Commissioner of Income-tax had observed that the applicant for registration as a Trust had undertaken activities which were contrary to the objects of the Trust. 16. In the result, we find that there is no reason to interfere with the impugned judgment of the High Court of Delhi. The appeal is, accordingly, dismissed. 11. The Hon ble Supreme Court in the aforesaid decision has thus clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since its inception as so claimed by it, it can still apply for registration. However, in this case, where the assessee company is in existence for more than a decade, the ld CIT(E) is well within his jurisdiction to examine such claim of no-activity by the assessee company and where it is found that some activities were actually been carried on by the assessee company, he is bound to record his satisfaction as to whether the activities so carried on are genuine and in accordance with its stated objectives or not. Secondly, the ld CIT(E) is well within his jurisdiction u/s 12AA(1)(a)(ii) to examine whether the assessee company is compliant under the extant laws as applicable and whether there are any changes in the memorandum and articles of association, the objects clause and constitution etc. since its incorporation and at the time of seeking registration. And thirdly, what are the proposed activities of the assessee company and whether they are genuine in the sense that they are in line with the objects of the assessee company or not again needs to be examined and a finding has to be recorded by the ld CIT(E) before he actually accepts or reject the application seeking registra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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