JAT SEWA SANGH,NEW DELHI vs. CIT(E), NEW DELHI

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ITA 8160/DEL/2019Status: DisposedITAT Delhi27 January 2021AY 2019-205 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 the CIT(E)'s rejection of the 80G approval was based on the denial of 12A registration, which was subsequently granted by the Tribunal. Therefore, the CIT(E) was directed to grant the 80G approval.

What were the facts?

The assessee's application for approval under Section 80G was rejected by the CIT(Exemption) because it was not registered under Section 12A. The CIT(E) also cited that charitable activities could not be substantiated.

What were the issues?

Whether the denial of Section 12A registration is a valid ground for rejecting an application for approval under Section 80G. Whether the CIT(E) should examine the genuineness of donations and activities at the time of granting 80G approval.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12A,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI KULDIP SINGH

For Appellant: Shri Satyajit Goel, Adv
Hearing: 27.01.2021Pronounced: 27.01.2021

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-

1.

This appeal by the assessee is preferred against the order of the ld. CIT(Exemption), New Delhi dated 29.06.2019 pertaining to A.Y 2019-20.

2.

The solitary grievance of the assessee is that ld. CIT(E) was not justified in not granting approval u/s 80G of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short].

3.

Representatives of both the sides were heard at length. Case records carefully perused.

4.

We find that the application of the assessee was rejected by the ld. CIT(E) by observing as under:

“Since the applicant is not registered u/s 12A(a) of the Income Tax Act, 1961, its application in Form No. 10G seeking approval u/s 80G is also rejected as charitable activities could not be substantiated.”

5.

We find that this Tribunal in vide order dated 23.09.2019 has granted registration u/s 12AA of the Act to the appellant. The relevant findings read as under:

6. It could be seen from the impugned order that the ld. CIT(A) does not dispute any of the objects to be charitable in nature. All his objection, however, revolves on the fulcrum of the source of the donations and verifiability of the same. As rightly contended

by the ld. AR, the source and genuineness of donations and the conduct of the activities of the trust would fall for consideration at the time of assessment and it is not relevant factors to reject the registration under section 12AA of the Act as is held in the decision held by the assessee enumerated (supra). Further in DIT vs. Foundation of Opthalmic & Optometry Research Education Centre (supra), the Hon’ble jurisdictional High Court clearly held that while examining application under section 12AA, concerned Commissioner/Director is not required to examine the question whether the trust had actually commenced and carried on its charitable activities, and statute does not prescribe a waiting period for registration till the trust commence its activities and applies the donations properly.

7. In view of the settled position of the law, we are of the considered opinion that the ld. CIT(A) is not justified in rejecting the registration and therefore, we direct the ld. CIT(A) to grant registration to the assessee trust under section 12AA of the Act.

6.

Since the sole basis for rejecting the application u/s 80G of the Act was that registration u/s 12AA of the Act was denied and since the registration is now granted by the order of this Tribunal [supra], we do not find any merit in the order of the ld. CIT(E), we direct the ld. CIT(E) to grant registration u/s 80G of the Act.

7.

In the result the appeal of the assessee in is allowed.

The order is pronounced in the open court in the presence of both the representatives on 27.01.2021.

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