HYDERABAD TITANS ROUND TABLE CHARITABLE TRUST,HYDERABAD vs. COMMISSIONER OF INCOME TAX (EXEMPTION), HYDERABAD

Brief facts of the case are that the assessee trust filed an application in Form 10A on 12.07.2019, seeking registration u/s 12A of the Act. The CIT (E) called for details and on perusal of the details filed by the assessee, he observed that during the relevant A.Y. the assessee has entered into an agreement for construction of a school building. He held that assessee has entered into an agreement with M/s Sunrise Developers, for such

Aggrieved, assessee preferred an appeal before the Tribunal by raising the following grounds of appeal. Appeal against order passed u/s.12AA(l)(B)(ii) of the l.T. Act, 1961. Grounds of appeal 1 The order of the learned CIT(Exemptions) passed u/s. 12AA(l)(B)(ii) of the Income Tax Act, dt.30/l/2020 is contrary to law and facts. 2 The Learned CIT erred in declining to grant registration u/s.12AA of the Income Tax Act. 3 The Learned CIT erred in concluding that there is no charitable activity involved in respect of construction of the school building which was undertaken only for the benefit of students coming from the poorer and down trodden section of the society. 4 The Learned Commissioner erred in not appreciating that the construction was undertaken at no profit no loss basis in order to provide proper accommodation to the students for the purpose of obtaining education. 5 The Learned Commissioner erred in concluding that the activities mentioned in community activity report are not reflecting in the accounts. The said allegation is denied and the Learned Commissioner was in error in not appreciating the accounts. 6 The appellant placed full documentary evidence in respect of the activities mentioned in community activity report. The Learned Commissioner erred in not correctly appreciating the said activity 7 The Commissioner erred in concluding that the donation receipts of the appellant did not contain requisite details. In the facts and circumstances of the case all details are available. 8 The Learned Commissioner erred in concluding that Sec.12A / 12AA registration cannot be granted to entities engaged in carrying out CSR activities said finding is erroneous and untenable.

We find that when an assessee makes an application for registration u/s 12A of the Act, it is the duty of the CIT (E ) to look into the objectives of the assessee and thereafter, the nature of the activities carried on by the assessee. In this case before us, a copy of the Trust deed is placed at pages 14 to 39 of assessee’s paper book and after going through the same, we find that the objectives of the assessee appear to be charitable in nature. This being the first year of its operation, the Revenue is required to look at the objects of the assessee trust. Therefore, we deem it fit and proper to direct the CIT(E ) to grant registration u/s 12A of the Act, if it is found that the objectives of the assessee are charitable in nature. Needless to mention that the assessee shall be given a fair opportunity of hearing. 4. In the result, assessee’s appeal is treated as allowed for statistical purposes. Order pronounced in Open Court on 27/07/2021.