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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI ABY T VARKEY, JM & SHRI PRASHANT MAHARISHI, AM
This appeal is filed by the Schmidt the education and healthcare foundation (the assessee/appellant) against the order for registration or approval or rejection on cancellation passed by the CIT exemption, Pune dated 31/05/2023 wherein the CIT has held that the assessee company is not indulging into purely charitable activities and the genuineness of the activities undertaken till that date is also questionable. The assessee has failed to discharge its onus by establishing the credibility and genuineness of the activities undertaken and therefore the application made under section 12 A (1) (ac) (iii) of the act was rejected.
The brief facts of the case shows that the assessee is a company incorporated for carrying out charitable activities and registered under section 8 of the companies’ act 2013. Provisional registration was granted by the CIT exemption as per order dated 27/10/2021. However, at the time of applying for the permanent registration under section 12 AB, the application was made on 26/11/2022. The assessee was assaulted details and explanation on 10/3/2023 by a letter dated 3/3/2023. The assessee submitted the relevant documents as per the version of the assessee on 10/3/2023. Certain additional information was also asked on 27/5/2023 fixing the date of hearing on 30/5/2023. These details were not possible for the assessee to compile within the required period and accordingly the adjournment was sought. Assessee also filed response to the extent possible on 30 May 2023. However, on 31/05/2023 the order was passed rejecting the application denying the registration. Therefore, assessee is aggrieved and is in appeal.
The learned authorized representative stated that adequate opportunity was not granted to it to submit the all the information. He submitted that the activities of the trust till today and the object also shows that it is not engaged in any commercial activities but educational
The learned CIT DR supported the order of the CIT exemption stating that when the adequate details are not furnished by the assessee, no fault can be found with the CIT in rejecting the application. Therefore, there is no merit in the appeal of the assessee.
We have carefully considered the rival contention and perused the order of the CIT exemption. We find that assessee is engaged in educational activities as per the memorandum of object. The provisional registration was granted to the assessee and therefore for regularization of that registration assessee filed application in form number 10 AB on 26/11/2022. The rejection of the application is also on account of failure on the assessee company to reply to the query raised by the CIT. However, the assessee submitted the reply but the submission was short in view of the adjudicating authority. Further, we do not find any force in the observation of the CIT exemptions that merely acquiring, selling, mat gauging and leasing land and buildings can be considered to be a business activity of the assessee. He has read the objects in isolation of the main object. These are the objects, which are stated to be business, are in fact subservient to the main object of education and to finance the activity of the Order pronounced in the open court on 30.10.2023.