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

PDF · subscribers
ITA 383/HYD/2020Status: DisposedITAT Hyderabad27 July 20214 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the objectives of the trust deed were charitable in nature. As it was the first year of operation, the Tribunal directed the CIT (Exemptions) to grant registration if the objectives were found to be charitable, after giving the assessee a fair opportunity of hearing.

What were the facts?

The assessee trust applied for registration under Section 12AA of the Income Tax Act. The CIT (Exemptions) rejected the application, holding that the construction of a school building by the trust was not a charitable activity and that the community service report did not reflect the accounts.

What were the issues?

Whether the construction of a school building constitutes a charitable activity for the purpose of registration under Section 12AA, and whether the CIT erred in rejecting the application based on the nature of activities and community service reports.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘A’ BENCH : Hyderabad

Before: Smt. P. Madhavi Devi & Shri A. Mohan Alankamony

Hearing: 15/07/2021

Date of Hearing : 15/07/2021 Date of Pronouncement : 27 /07/2021 O R D E R

PER P. MADHAVI DEVI, JM

1.

This is an appeal filed by the assessee against the order of CIT (E), Hyderabad dated 30.01.2020 rejecting assessee’s application for registration u/s 12AA of the I.T.Act, 1961.

2.

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 Hyderabad Titans Round Table Charitable Trust, Hyd. construction and according to him it is not charitable activity. He, therefore, held that no charitable activity is involved in the process. He further observed from the Community Service report submitted by assessee that no such activity of construction for extension of school was carried out by the assessee. He, therefore, denied registration u/s 12A of the Act.

3. 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. Hyderabad Titans Round Table Charitable Trust, Hyd.

9 The Learned Commissioner(E) erred in not appreciating the charitable activities carried on by the appellant Trust despite full details being furnished to the learned CIT(E). In the facts and circumstances of the case, the denial of registration u/s.12A / 12AA is erroneous and uncalled for. 10 The appellant craves leave, to add to, amend or alter any of the aforesaid grounds as the occasion may require. 11 For these and other reasons that will be submitted at the time of hearing of the appeal, the appellant prays that the impugned order dt.30/1/2020 be set aside and the Learned Commissioner (E) be directed to grant registration u/s.12A /12AA of the Income Tax Act.”

3.

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.

More judgments on Section 12AA

All 4,243 judgments and leading authorities on Section 12AA →

Recent GST High Court judgments

Search GST case law →