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TMI Blog2024 (9) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... m fit that appellant may be allowed one more opportunity to prove its claim before the PCIT(E). Accordingly, we set aside the impugned order of learned CIT(E) and direct the learned CIT(E) to pass a de novo order in accordance with law after providing reasonable opportunity to the assessee - Thus, the matter is remanded back to the Ld. CIT(E). Appeal filed by the assessee is allowed for statistical purposes. - Dr. M. L. Meena, Accountant Member And Sh. Udayan Dasgupta, Judicial Member For the Appellant : Sh. Sudhir Sehgal, A.R. For the Respondent : Sh. Amit Jain, CIT-D.R. ORDER PER DR. M. L. MEENA, AM: This appeal has been filed by the assessee against the order of the ld. Commissioner of Income Tax (Exemptions), Chandigarh dated 22.03.2024 challenging therein rejection of its application for registration u/s 12A of the Income Tax Act, 1961. 2. The assessee has raised the following grounds of appeal: 1. That the Ld. CIT Exemptions Chandigarh has erred on facts and laws while rejecting the application filed in Form No. 10AB of the Act Dt. 30.09.2023, seeking the registration under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, vide order in Form No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,29,976.40 come from Harry Auto Fuel and same day, Rs. 5 lacs transferred to Madhwa Printers. On 31.03.2022, Harry Auto Fuel was paid back Rs 5 lacs. Again, it was found that deposits of Rs. 3 lacs and Rs. 2 lacs were received from Harry Auto Fuels on 0106.2023 and 12,06.2023 respectively which were transferred to Madhwa Printers on the same day, Thus, It is amply clear that the applicant has not incurred any expense on actual charitable activity as mentioned in its MoA. Therefore, applicant's claim of registration under section 12AB is liable to be rejected on ground of not proving genuineness of its activities as per its stated objects. 4. Ground no. 1 is not pressed by the appellant assessee and therefore, it is dismissed as not pressed. 5. In ground no. 2, the appellant has challenged the rejection of its application filed in Form No. 10AB seeking registration under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 without appreciating the replies and documentary evidences filed to prove the genuineness of activities filed during the course of proceedings before him. 6. The ld. AR has submitted that the assessee trust had moved a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of the above said object, our trust has been granted registration by the Registrar of Firm Societies, Punjab and, thus, it is a genuine trust. 8. There is an undertaking given by the secretary of the society from pages 31 to 33 of the paper book that the society shall not carry any trade/business and it shall exist only for charitable purposes and no religious activities shall be carried out. 9. Income expenditure account for the year ending 31.03.2023 have been placed at pages 34 to 36 of the paper book and for the year ending 31.03.2023, the profit loss account and balance sheet is there along with other details upto pages 37 to 41 of the paper book. 10. Detail of the expenses incurred and ledger copies of the educational expenses, medical treatment and milk provided to the children along with the copies of bill have been placed from pages 42 to 46 of the paper book. 11. Copy of the bank account has been placed at pages 47 to 54 of the paper book. 12. Copies of the activities being carried out along with the proof have been placed at pages 55 to 63 of the paper book. 13. These activities clearly demonstrate that COVID which had created lot of panic and many people had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bare reading of the Section, it is very clear that CIT (E) has not to see the quantum of activities and once the activities are there may be small, then the said registration cannot be denied. The law is very clear on this. 16. This view has been taken in the recent judgment of Rajasthan High Court in the case of Gagandeen Niranjan Lai Data Charitable Trust reported at 463 ITR 690 (Raj) (2024) in which though there was issue of genuineness of the activities for grant of 80G(5), where similar conditions are there and it was held that when there are no objections to the genuineness of the activities, raising of the objections only on the quantum of the activities is not proper. This can be seen from 4th proviso to Section 80G(5). For reference, the same is reproduced below: Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,- (i) where the application is made under clause (/) of the said proviso, pass an order in writing granting it approval for a period of five years; (ii) where the application is made under clause (/'/') or clause (Hi) of the said proviso,- (a) call for such documents or informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on Hon'ble Supreme Court in the case of M/s Anand Social and Educational Trust v/s CIT in Civil Appeal No.5437-5438/2012, dated 19/02/2020. 8. Heard the rival contentions, perused the material on record, written submissions and citations filed before us. The ld. CIT(E) has observed that the activities carried out in lieu of the objects of the trust were prima facie neither charitable in nature nor in consonance to the objects of the Trust. The ld. CIT(E) objection was that the activities of the appellant Trust were not found as per the objects of the MoA and do not conclusively prove the genuineness of the activities of the Society. He stated that in the absence of such documents, it could not be determined whether the applicant has genuinely carried out activities as per its objectives. From the Ledger submitted on charitable activities done are all small cash payments which do not inspire confidence, while perusing the financial statements of the applicant. It was also noticed that the applicant has debited an expense of Rs. 6,81,214/- to Printing Poster Expenses during Covid time and other expenditure relating to Bank Expenses amounted to Rs. 88.50/-. The CIT(E) has dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial creation without objectives in absence of any genuine activities and available funds. Meaning thereby that the appellant Trust was involved in activities which are not genuine by any definition. 12. In the case of an ongoing entity, at the stage of grant of registration u/s 12AA of the Act, the Ld. CIT(Exemption) is supposed to examine both the objects of the Trust and genuineness of its activities in consonance to its objectives. In the Judgment given by the Hon'ble Supreme Court in the case of M/s Anand Social and Educational Trust v/s CIT in Civil Appeal No.5437- 5438/2012 vide order dated 19/02/2020, it was observed that where the trust was newly constituted and proposed to undertake the activities, but in the present case, the trust was an old trust, and carrying out activities from earlier years. In our view, the decision of Hon ble Apex Court supports the decision of the Ld. PCIT. In the peculiar facts presented before the Ld. CIT(E) as discernable from the record, the case law relied on by the ld. AR are distinguishable in the instant case. Hon ble Apex Court in the case of Lai Chand Bhagat Ambika Ram vs. CIT reported at 37 ITR 288, Umarcharan Shaw Brothers reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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