M/S. BANTARA SANGHA YEKKARU,DAKSHINA KANNADA vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), BENGALURU

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ITA 1947/BANG/2019Status: DisposedITAT Bangalore27 October 2020AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the absence of activities cannot be a basis to refuse 80G approval if registration under 12AA was granted. The order of the CIT(E) was set aside for fresh consideration.

What were the facts?

The assessee, a public charitable trust, applied for registration under section 12AA and recognition under section 80G. While registration under 12AA was granted, the application for 80G recognition was rejected on the same day, citing absence of activities.

What were the issues?

Whether absence of activities can be a ground to deny 80G recognition when 12AA registration is granted. Whether the CIT(E) acted inconsistently in granting 12AA registration but rejecting 80G recognition.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AA

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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SHRI. B. R. BASKARAN & SMT. BEENA PILLAI

For Appellant: Shri Muzaffar Hussain, CIT (DR)
For Respondent: Shri Muzaffar Hussain, CIT (DR)

ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order dated 26/07/2019 passed by Ld. CIT (E), Bangalore denying recognition under section 80 G of the act. 2. Assessee is a public charitable trust constituted under trust deed dated 16/10/2014. It is submitted that, application for grant of registration under section 12 AA of the act and recognition under 80 G of the act were filed on same day on 18/01/2019. It is submitted that various details were called for by Ld.CIT(E) vide notice dated 09/07/2019 and 19/07/2019. Assessee had furnished all the details vide its letter dated 13/07/2019 and 23/07/2019. It has been submitted by Ld.AR that, there was no further communication from Ld.CIT(E) however, assessee was granted registration under section 12AA of the Act vide order dated 26/07/2019 and application under section 80G was rejected on the same day.

3.

Ld.AR placed reliance on decision of coordinate bench of thei Tribunal in case of M/s Manipal Alimony of Nphrology Trust vs CIT in and 549/B/2013 wherein, this Tribunal following decision of Hon’ble Karnataka High Court in case of DDIT (E) vs Meenakshi Endowment Trust reported in 354 ITR 219, held that at the time of grant of registration under section 12A of the Act as well as approval under section 80G(5) (vi) of the Act, absence of activities of the trust cannot be the basis to refuse the approval.

4.

On the contrary Ld.Sr.DR relied on orders passed by Ld.CIT(A).

5.

We have perused submissions advanced by both sides in light of records placed before us. We are in agreement with the contentions put forth by Ld.AR. The reasons assigned for not granting approval under section 80G(5)(vi) is directly contradictory to the action of Ld.CIT(E) in granting registration under section 12A of the Act. We therefore set aside the order of Ld.CIT(E) and remand the question of grant of approval under section 80G(5) (vi) of the Act to Ld.CIT(E) for fresh consideration in the light of the decisions referred to by Ld.AR. Needless to say that, proper opportunity of being heard should be granted to assessee. Assessee is also directed to file all relevant details as called upon. Accordingly grounds raised

by assessee stands allowed for statistical purposes. In the result appeal filed by assessee stands allowed for statistical purposes. Order pronounced in open court on 27th Oct, 2020 Sd/- Sd/- (B. R. BASKARAN) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 27th Oct, 2020. /Vms/ Copy to:

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