BRINDLE HOMES TRUST,BENGALURU vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BENGALURU

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ITA 2413/BANG/2024Status: DisposedITAT Bangalore29 January 2025Bench: SHRI WASEEM AHMED (Accountant Member), SHRI PRAKASH CHAND YADAV (Judicial Member)1 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee had commenced activities and the documents required verification. For the 80G application, the Tribunal directed a fresh examination of the trust deed. Both matters were restored to the CIT(Exemptions) for fresh adjudication.

What were the facts?

The assessee trust applied for permanent registration under Section 12A and 80G of the Income Tax Act. The CIT(Exemptions) denied the 12A registration citing premature application without commencing activities, and denied 80G registration due to defects in the trust deed.

What were the issues?

Whether the trust had commenced its charitable activities for 12A registration and if the trust deed was compliant for 80G registration.

Which sections of the Income-tax Act were involved?

Section 12A,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV

Hearing: 27.01.2025

PER PRAKASH CHAND YADAV, JUDICIAL MEMBER:

1.

These two appeals are related to the same assessee arising out of the orders of ld. CIT(Exemptions), Bangalore as follows:

CIT(E) DIN order dated 2412/Bang/2024 NA 29.10.2024 ITBA/EXM/F/EXM45/2024- 25/1070023921(1) 2413/Bang/2024 NA 29.10.2024 ITBA/EXM/F/EXM45/2024- 25/1070023777(1) For the sake of convenience, we are deciding these two appeals by way of this consolidated order.

2.

One appeal is related to the denial of issue of Certificate u/s 12A of the Income Tax Act, 1961 (in short “The Act”) and the other appeal is related to the denial of issue of Certificate u/s 80G of the Act.

& 2413/Bang/2024 Brindle Homes Trust, Bangalore Page 2 of 3 3. Short facts (with respect to 12A registration) as coming out from the order of the authorities below are that the assessee is a trust registered via a Trust deed dated 25.8.2022 and has got provisional registration u/s 12A of the Act on 29.3.2024, which was valid up to the AY 2026-27. Thereafter, assessee has filed form 10AB on 27.4.2024 seeking permanent registration u/s 12A of the Act before concerned authority. The concerned authority while deciding the application of the assessee has observed that the assessee has failed to commence any activity in accordance with its objects. The ld. Authority was of the view that the assessee has applied for the permanent registration prematurely i.e. without commencing the activity as per its objectives. At last, the ld. Authority dismissed the application of the assessee filed u/s 12A of the Act.

3.1 So far as the rejection of application filed u/s 80G of the Act is concerned, the ld. CIT(Exemption) observed that there was defect in the trust deed in as much as there was no dissolution clause or amendment clause in Trust deed and hence, the trust is not entitled for registration u/s 80G of the Act.

3.2 Aggrieved with the order of ld. CIT(Exemptions), assessee come up in appeal before us.

4.

Ld. Counsel for the assessee contended that the assessee has in fact utilized the funds as per the object of the trust deed, he drawn the attention of the Bench towards the fact that the assessee is constructing one building, for carrying out charitable activities. Similarly, for the application u/s 80G of the Act, the assessee has drawn the attention of bench towards trust deed and contended that the observations of the ld. CIT(Exemptions) are factually incorrect.

5.

Ld. D.R. relied upon the orders of authorities below.

6.

We have heard the rival submissions and perused the materials available on record. It is the case of the revenue that the assessee has prematurely applied for the registration without commencing the & 2413/Bang/2024 Brindle Homes Trust, Bangalore Page 3 of 3 activities. However, the documents filed before us would show that the assessee has already commenced the activities. These documents required verification by the concerned authority and hence, we are of the view that the matter shall be restored to the file of ld. CIT(Exemptions). So far as the denial of issue of certificate u/s 80G of the Act is concerned, we are of the view that the concerned authority would examine this application afresh considering the trust deed as relied upon by the assessee and decide the matter a fresh in accordance with law. Therefore, both the matters are restored to the file of CIT(E) for examining afresh. Needless to say that the Ld CIT(E) would grant sufficient opportunities to the assessee before passing any order.

7.

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

Order pronounced in the open court on 29th Jan, 2025

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