JAGDISH MATANHELIA MEMORIAL TRUST,PRATAPGARH vs. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW

Heard. We find that the assessee filed an application for registration under section 12A(1) of the Income-tax Act, 1961 on 14/2/2019 with the CIT (Exemptions), Lucknow, who rejected the application of the assessee, observing that the activities/objects of the applicant do not fall under the limb of ‘education’, as charitable purposes. The submission of the ld. Counsel for the assessee before us was that the assessee had filed before the ld. CIT(E) all the requisite documents, the copies of which have been filed before us too. We find that in addition to other details, the assessee had furnished before the ld. CIT(A) the brief details of main area of the trust activities [APB:10 & 11] and the objectives of the trust [APB:18]. The ld. CIT (E) had reproduced the details of main area of the trust activities as furnished by the assessee. But he has not examined the objects of the assessee-trust, whether the trust was formed to undertake charitable activities or not. Moreover, the ld. CIT (Exemption), Lucknow has not pointed out any specific activity, which can be said to be a non-charitable activity. It is a settled position of law that while granting registration under section 12A of the Act, the ld. CIT (Exemptions) is required to examine the objects of the assessee. If the objects of the assessee are charitable in nature, registration should be granted to the assessee. It can only be denied, if the ld. CIT (Exemptions) has brought something on record to establish that the assessee was engaged in activities other than charitable ones. This aspect was examined by this Bench of the Tribunal in various cases, wherein, the Tribunal held that while granting registration under section 12A of the Act, the ld. CIT (Exemptions) is required to examine, as to whether the objects of the applicant are of charitable nature or not. In the instant case, the ld. CIT (Exemptions) has not examined the nature of the objects of the trust, but he has denied the registration. Therefore, we set aside the order of the ld. CIT (Exemptions) and restore the matter to his file with a direction to re-adjudicate the issue of grant of registration under section 12A of the Act in the light of the objects of the assessee- trust, preferably within two months from the date of receipt of this order, on affording due opportunity of hearing to the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on 13/02/2020.