ABHINAV BHARAT,MUMBAI vs. INCOME TAX OFFICER, EXEM. WARD 1(1), MUMBAI, MUMBAI

Before us, the Ld. Counsel submitted that the rejection has been founded solely on the premise that no expenditure was reflected in the accounts of the trust during the relevant period. It was contended that absence of expenditure by itself cannot lead to the conclusion that the trust had not undertaken any activity or that its activities were not genuine. Attention was drawn to the affidavit and supporting material placed in the paper book wherein it has been stated that the trust continued to pursue its stated charitable objectives through various initiatives, maintenance of its website,

We have considered the rival submissions and perused the material available on record. A perusal of the impugned order reveals that the principal basis for rejection of registration under section 12AB is the finding that no expenditure was incurred on the objects of the trust and, therefore, the genuineness of the activities could not be established. The record further shows that the assessee has placed before the authorities certain explanations and supporting material to demonstrate that activities in furtherance of its objects were being pursued notwithstanding the absence of expenditure reflected in the trust accounts. Whether such material is sufficient to establish the genuineness of the activities and whether the requirements of section 12AB stand satisfied are matters which require proper verification and examination by the competent authority. In our considered view, the impugned order does not reflect a comprehensive examination of these aspects. Since the rejection of approval under section

Considering the totality of facts and in the interest of substantial justice, we deem it appropriate to set aside the impugned orders and restore the entire matter to the file of the Ld. CIT (Exemptions). The Ld. CIT (Exemptions) shall examine afresh all the explanations, documents and evidences that may be furnished by the assessee in support of its claim, and thereafter decide the applications under sections 12AB and 80G independently and in accordance with law by passing a speaking order. Needless to mention, adequate and effective opportunity of hearing shall be afforded to the assessee, which shall also extend full cooperation and furnish all requisite details as may be called for during the course of fresh proceedings.

In the result, both the appeals of the assessee are allowed for statistical purposes.