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Facts
The assessee, a section 8 company registered on 26/11/2023, applied for permanent registration under sections 12AA and 80G. The CIT(E) dismissed the application stating that the assessee spent a meager amount on charitable activities.
Held
The Tribunal held that the CIT(E) cannot step into the shoes of the assessing officer at the stage of granting registration. The CIT(E) is required to examine only the objects of the trust and the genuineness of its activities, not the quantum of expenditure.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration under sections 12AA and 80G solely on the ground of meagre expenditure on charitable activities, without considering the nature of objects and genuineness of activities.
Sections Cited
12AA, 80G, 10AC, 11, 13
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Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: DR. DIPAK P. RIPOTE & SHRI PRAKASH CHAND YADAV
ORDER PER PRAKASH CHAND YADAV, JUDICIAL MEMBER Both these appeals of assessee are arising from separate orders of Ld.CIT(E), Bengaluru dated 24/03/2025.
& 1289/Bang/2025 3. The brief facts of the case as coming out from the authorities below are that appellant is a section 8 company and incorporated on 26/11/2023. The appellant is a non-profit organisation. The main objects of the appellant are that to provide relief to the poor, education and skill development and environmental sustainability. The appellant got temporary/provisional registration in form 10AC on 31/03/2024. Thereafter the appellant vide application dated 30/09/2024 applied for permanent registration u/s. 12AA and 80G.
The application, for permanent registration, filed by the assessee has been dismissed by the Ld.CIT(E) solely on the ground that the appellant has spent a meagre amount in furtherance of charitable activities.
Aggrieved with the order of the Ld.CIT(E), the assessee has come up in appeal before us.
Since the facts and circumstances of both the appeals are same and related to the same assessee, we are deciding these appeals by way of this consolidated order.
The Ld. Counsel for the assessee reiterated the arguments made before the lower authorities and contended that it is settled position of law that Ld.CIT(E) cannot step into the shoes of assessing officer. It is next contended that at this stage of 12AA registration, the Ld.CIT(E) is required to see only the objects of the trust, whether they are charitable or not and the activities of the trust of the assessee, whether they are genuine or not.
The Ld. DR relied upon the order of the Ld.CIT(E).
After considering the rival submissions, we hereby observe that the Ld.CIT(E) has not at all disputed the factum that the objects of the assessee, which is a section 8 company are charitable in nature. The Ld.CIT(E) has merely rejected the application on the ground that the assessee has spent a & 1289/Bang/2025 meagre amount towards the charitable activities. In our view, the at the time of grant of registration u/s. 12AA and 80G two things are to be examined by the CIT(E) i.e. a) Whether activities of the assessee are genuine b) Whether the objects of the trust are charitable in nature.
It is settled position of law that at the time of grant of registration the CIT(E) cannot step into the shoes of assessing officer and examine the benefits of section 11 and 13, which are to be scrutinized by the assessing officer at later stage. In view of the above facts and circumstances of the case, we are of the firm opinion that the assessee is entitled for 12AA registration as well as the 80G registration. Hence both the appeals of the assessee stands allowed.
In the result, both the appeals filed by the assessee are allowed.
Order pronounced in the open court on 20th August, 2025.