VISWA EDUCATIONAL SOCIETY,KURNOOL vs. COMMISSIONER OF INCOME TAX, (EXEMPTIONS), HYDERABAD

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ITA 1720/HYD/2019Status: DisposedITAT Hyderabad12 July 20213 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 held that commencement of charitable activities is not a mandatory pre-condition for granting Section 12AA registration. Since no other substantive reason was provided for rejection, the appeal was allowed.

What were the facts?

The CIT(Exemptions) rejected the assessee's application for Section 12AA registration, citing the failure to explain certain donations. The donations in question were from M/s. Vishwam Educational Society and involved specific individuals.

What were the issues?

Whether the commencement of charitable activities is a mandatory pre-condition for Section 12AA registration. Whether the CIT(Exemptions) provided sufficient grounds for rejecting the registration.

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

O R D E R PER S.S.GODARA, J.M. :

This assessee’s appeal arises from the CIT(Exemptions)- Hyderabad’s order dated 30-09-2019 passed in F.No.CIT(E)/Hyd/183(03)/12A/2018-19 in proceedings u/s. 12AA(1)(b)(ii) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

It transpires at the outset that the CIT(Exemptions)’s order under challenge has declined the assessee’s Section 12AA registration after recording its failure to explain the issue of donation(s) inter alia coming from M/s.Vishwam Educational Society (both have the same person Mr.Kaipa

:- 2 -: ITA No. 1720/Hyd/2019 Ashok Raj as treasurer and chairman) Rs.4,00,000/- and Rs.1,00,000/- involving Mr.T.Siva Rajesh and Mr.Madhana Gopal; respectively.

3.

Learned departmental representative fails to dispute that the hon'ble apex court’s recent decision in M/s.Ananda Social and Educational Trust Vs. CIT (2020) 426 ITR 340 (SC) holds that commencement of charitable activities by the assessee concerned is nowhere a mandatory pre-condition for the purpose of granting Section 12AA registration.

4.

We thus accept assessee’s instant Section 12AA registration grievance keeping in mind the fact that no other substantive reason has been quoted in the CIT(E)’s rejection order under challenge. It is made clear that the learned departmental authorities shall be at liberty to examine genuineness of all these aspects in appropriate proceedings as per law.

5.

This assessee’s appeal is treated as allowed in above terms.

Order pronounced in the open court on 12th July, 2021

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