YOUR NEIGHBOURHOOD CHURCH ASSOCIATION,MUMBAI vs. CIT (EXEMPTION), MUMBAI

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ITA 2917/MUM/2023Status: DisposedITAT Mumbai21 December 2023AY 2023-246 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found a mismatch in the nature of activities stated in the application forms. It directed the CIT(E) to re-examine the issue after the assessee demonstrates that the trust does not exist for the benefit of a particular religious community or caste.

What were the facts?

The assessee trust applied for registration under Section 12AA, but the CIT(E) rejected it due to a mismatch in the nature of activities mentioned in different application forms and a perceived violation of Section 12AB(4). The assessee argued that the mismatch was technical and not deliberate, and their activities were for the benefit of all mankind, not a specific community.

What were the issues?

Whether a mismatch in the nature of activities in application forms and a potential violation of Section 12AB(4) warrant rejection of registration, and if principles of natural justice were violated by not providing an opportunity to clarify.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12AB(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

For Appellant: Shri Raveendran P. M. &, Shri Nathan Akshith Prakash, ARs
For Respondent: Shri Dr. Kishor Dhule, CIT DR
Hearing: 14.12.2023Pronounced: 21.12.2023
1.

Neighbourhood Church Association‟ against the order passed by Commissioner of Income Tax (Exemption) Mumbai, [in short CIT(E)], dated 27th June, 2023, wherein the application filed by the assessee for registration under Section 12AA of the Act, was rejected.

2.

Assessee is aggrieved with the same and has preferred the appeal raising following grounds of appeal:-

2. On the facts and in the circumstances of the case and in law the learned CIT (E) erred by taking the view that the appellant had violated as it applied “any part of its income for the benefit of any particular religious community or caste”, which is not the case. Also it is the case that the learned CIT (E) had not given opportunity to clarify the same, through show cause notice/ personal hearing, during this proceeding, which is tantamount to the violation of principle of natural justice.

3. On the facts and in the circumstances of the case and in law the learned CIT (E) erred in deciding the matter based on technical issues rather than considering nature of the activity. ”

3.

The brief facts of the case is that the assessee is a company incorporated on 7th May, 2021, under the Companies Act, 2013, formed for the purpose of religious and charitable activities. The assessee has the object to serve to the people as per clause no. 3 of the Memorandum of Association. It filed its application for provisional registration on 16th February, 2022, in form no 10A of the Act and order of provisional registration was

4.

Ld AR submitted a paper book and also submitted that the error of correcting nature of activities in final registration is made and assessee is not for any particular cast or creed. Therefore, there is no violation of section 12 AB of The Act.

5.

The ld CIT DR supported the order of ld CIT [ E ] stating that correct nature of activities are not stated and further the object are in violation of section 12 AB of the Act.

6.

We have heard the assessee‟s counsel as well as the learned CIT Departmental Representative. On perusal of the order of the learned CIT (E), in form no.10AD of the Rules, it is found that the nature of activities mentioned by the assessee in form no.10 AB, was “religious cum charitable”. However, in form no.10A, assessee mentioned the nature of activities is “charitable”. Therefore, there is mismatch of the activities in form no.10A and form no.10AB. The learned CIT(E) on verification of the trust deed or Memorandum of Articles found that the trust has mentioned religious activities which is a violation of Section 12AB(4) of the Act. The assessee contested that assessee objects are not with respect to the benefit of any particular community or caste but to the whole society. It is found that mainly the application was rejected for the

7.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 21.12.2023.

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