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Ashok Singhal Vedic Nyas, Gurugram vs CIT | s.12A(1)(ac)(iii), 12A | ITAT Delhi 2025 | BharatTax

ASHOK SINGHAL VEDIC NYAS,GURUGRAM vs. CIT (EXEMPTION), CHANDIGARH

ITA 1795/DEL/2024Status: DisposedITAT Delhi23 July 2025Bench: SHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI M BALAGANESH (Accountant Member)4 pages

AI SummaryRemanded

Facts

The assessee, Ashok Singhal Vedic Nyas, was denied registration under Section 12A(1)(ac)(iii) by the CIT(Exemptions) due to failure to substantively show activities aligning with its MOA and lack of conclusive proof of genuineness of activities. The CIT(Exemptions) also noted minimal expenditure in previous financial years and did not adequately examine the genuineness of the trust's objects.

Held

The tribunal ruled that commencement of activities is not mandatory for newly formed trusts before Section 12A registration. It remitted the matter back to the CIT(Exemptions) for fresh consideration, directing them to properly examine the genuineness of the trust's objects and provide the assessee a fair hearing.

Key Issues

Whether commencement of activities is a prerequisite for Section 12A registration, and if the CIT(Exemptions) adequately assessed the genuineness of the trust's objects.

Sections Cited

12A(1)(ac)(iii), 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI M BALAGANESH

For Appellant: Shri R.C. Rai, CA

For Respondent: Shri Jitender Singh, CIT DR

Hearing: 04.06.2025

सुनवाईक�तारीख/ Date of hearing: 04.06.2025 23.07.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.

This appeal is filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Exemption), Chandigarh dated 23.02.2024 in denying registration u/s 12A(1)(ac)(iii) of the Act.

2.

The Ld. Counsel for the assessee, at the outset, submitted that registration u/s 12A(1)(ac)(iii) of the Act was denied to the assessee by the Ld. CIT(Exemption) on the ground that the assessee failed to substantively show the activities as per the objects of the MOA and therefore the Ld. CIT(Exemption) was of the view that assessee did 1 not conclusively prove the genuineness of the activities. Ld. Counsel for the assessee placing reliance on the following decisions submitted that commencement of activities before granting registration is not must: -

1.

Ananda Social & Education Trust Vs. Commissioner of Income Tax & Anr. reported in 2020-426-ITR-340(SC);

2. Director of Income Tax Vs. Foundation of Ophthalmic & Optometry Research Education Centre reported in 2013-355- ITR-361(Del);

3. WeVysya Vs. Commissioner of Income Tax (Exemptions) reported in TS-614-ITAT-2025 (Bangalore).

3.

On the other hand, the Ld. DR submitted that the assessee has not furnished any relevant document to prove the genuineness of the activities of the trust and therefore the Ld. CIT(Exemption) has rightly rejected the registration u/s 12A of the Act.

4.

Heard rival submissions, perused the order of the Ld. CIT(Exemption) and the case laws relied on. On perusal of the order of the Ld. CIT(Exemption) it is noticed that the registration u/s 12A was denied to the assessee for the reason that the assessee could not furnish any documents to substantiate that the assessee has carried out the activities as per the objects of the MOA and thereby do not conclusively prove the genuineness of the activities. It is also the observation of the Ld. CIT(Exemption) that the assessee’s financial statements furnished also do not support any performance of any activity by the assessee trust. No expenditure has been incurred in FY 2021-22 and in FY 2020-21 only an amount of Rs.1,72,000/- was spent. Therefore, the Ld. CIT(Exemption) was of the view that in the absence of documents of proving carrying out of the activities of the assessee he was not in a position to determine whether the assessee is genuinely carrying out activities as per its objects. However, we observe that the Ld. CIT(Exemption) appears to have not examined the genuineness of the objects of the assessee as there was no finding as to what are the objects of the assessee and whether such objects of the assessee are charitable in nature or not. Even before us the assessee did not file copy of MOA to ascertain the genuineness of the objects of the assessee. Therefore, we are of the view that this matter should go back to the file of the Ld. CIT(Exemption) who shall examine the objects of the assessee as to whether they are genuinely charitable in nature or not. In so far as the commencement of activities before registration, we hold that in the light of the decisions referred to above there need not be any especially when formed newly, before granting registration u/s 12A of the Act. Thus, we restore this appeal to the file of the Ld. CIT(Exemption) who shall decide the application for registration afresh in the light of our above observations and in the light of the decisions referred to above, after providing adequate opportunity of being heard to the assessee.