ULGULAN FOUNDATION,RANCHI vs. CIT (EXEMPTION), PATNA

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ITA 223/RAN/2018Status: DisposedITAT Ranchi14 July 20203 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that non-commencement of charitable activities is not a prerequisite for granting Section 12AA registration, citing a Supreme Court decision. Therefore, the orders of the CIT(Exemption) were reversed.

What were the facts?

The Commissioner of Income-tax (Exemption) denied registration under Section 12AA to two trusts, M/s Binod Vichar Manch and Ulgulan Foundation. The denial was based on the ground that the CIT could not verify the commencement of charitable activities.

What were the issues?

Whether the commencement of charitable activities is a mandatory condition for granting registration under Section 12AA of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RANCHI ‘E-COURT’AT KOLKATA

Before: Shri S.S, Godara, JM & Dr. A.L. Saini, AM

आदेश /O R D E R Per Bench(Oral): These two assessees’ separate appeals arise against the Commissioner of Income-tax (Exemption), Patna’s separate orders dated 19.02.2018 & 15.03.2018 involving proceedings u/s 12AA(1)(b)(ii) of the Income Tax Act, 1961 (in short ‘the Act’); respectively. Heard both the parties. Case files perused.

1.

ITA No.264/Ran/2018 M/s Binod Vichar Manch & Ulgulan Foundation Page 2 2. It transpires at the outset that the CIT(Exemption)’s identical orders under challenge dated 19.02.2018 & 15.03.2018; respectively, have declined section 12AA registration to both these assessees on the sole ground that he could not verify the commencement of charitable activities at their behest. We make it clear that there is not even a single adverse remarks coming from the CIT(Exemption)’s side regarding the assessees’ object clauses in the respective trust deeds. We deem it appropriate to reproduce the CIT(Exemption)’s former order as follows:

“The applicant is a Trust. An application in Form No. 10A of Income-tax Rules, 1962 was filed on 04.09.2017 for registration u/s 12AA of the Income Tax Act, 1961. The applicant was requested to appear on 09.11.2017 either in person or through an authorized representative with relevant documents for verification of the genuineness of the charitable activities of the Trust but none appeared or filed any written submission. Given one more opportunity to appear on 05.12.2017. On 05.12.2017 Sri Rahul Choudhary CA and A.R. of the Trust attended the hearing and the case was discussed. From the audit report as on 31.03.2017, it transpires that no any activity has been carried out by the applicant trust.”

2.1 The factual position is no different in the CIT(Exemption)’s latter order as well.

3.

Coming to sole substantive issue of non-commencement of charitable activities as a precondition for granting section 12AA registration, we find that the same is no more res integra in view of hon’ble apex court’s recent decision in Ananda Social and Educational Trust Vs CIT & Anr. (Supreme Court); Civil Appeal No(S).5437- 5438/2012 dated 19/02/2020 deciding the issue in assessee’s favour. We therefore reverse the CIT(Exemption)’s both orders under challenge declining registration to these two assessees.

4.

These two assessees’ appeals are allowed.

Order pronounced in open court on 14/07/2020.

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