NASSD ASSOCIATION OF SKILL AND SOCIAL DEVELOPMENT,CHENNAI vs. CIT, EXEMPTIONS,, CHENNAI

The assessee is a company registered on 06.01.2023 u/s.8 of the Companies Act, 2013 and it filed an application dated 20.07.2024 in Form 10AB, seeking registration u/s.12AB of the Act. The Ld.CIT(E) rejected the said application dated 20.07.2024 on the ground that the assessee is not engaged in any charitable activities and has not substantiated its nature of activities as charitable. Aggrieved by the order passed by the ld.CIT(E), the assessee is in appeal before us.

The ld.CIT(E), pursuant to the application made by the assessee, for the approval of registration u/s.12AB called for the various records, including the memorandum of association, articles of association and its financial statements. The ld.CIT(E) carried out an analysis of the financial statements and held that the assessee is not carrying out any charitable activities and rejected the approval sought for registration u/s.12AB of the Act.

The case of the ld.CIT(E) is as follows: The income from operations earned by the assessee was Rs.12,992/-, which arises from assessment fees, Authorised Training Centre Affiliation, Consultancy Fee, Empanelment fees, SMART BSDC Online fees, SSC Assessment Fees and Welfare Scheme Assistance. These heads of income point out that the assessee is not engaged in charitable purpose. Further, the assessee collaborates with Leeds Skill Training Centre Private Limited and had conducted skill development program for 100 urban youth who are below poverty line and earned a surplus of Rs.4,77,200/- and Rs.1,57,100/- for year ending March, 2023 and 2024 respectively. Since the assessee had earned profit, it ceases to exist as a charitable organization. Further, the objects of relief of the poor, environmental protection and education are not to be seen from the financial statements and hence the approval was rejected. Further, the ld.CIT(E) held that the more than 20% of its income is applied for the purposes specified above and hence registration could not be granted.

Before the ld.CIT(E), the assessee contended that at the time of grant of registration, the only two conditions that could be verified by the ld.CIT(E), as per section 12AB are (a) the genuineness of activities of the trust or institution and (b) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects. The ld.CIT(E) is not bound to make an enquiry akin to assessment,