BHARTIYA MAHILA EVAM GRAMIN UTHAN SANSTHAN,BASTI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW

The assessee is aggrieved at this rejection of its application and has accordingly filed this appeal. Sh. B.P. Yadav, Advocate appeared on behalf of the assessee argued the matter. It was submitted that the assessee society had already Bhartiya Mahila Evam Gramin Uthan Sansthan A.Y. 2023-24 been granted provisional registration under section 12AB of the I.T. Act vide registration dated 24.09.2021 and had applied for renewal of registration vide its application dated 10.03.2024, which was rejected on the grounds that the activities of the assessee society were not charitable in nature. However, it was submitted that the assessee was a charitable society engaged in carrying out activities such as providing nutrition, food, ration kit, clothes and such other help to the children of poor families and that these activities were within the objects of the trust deed. It was further submitted that while holding that the activities being undertaken by the assessee were not charitable activities, the ld. CIT(Exemption) had not provided reasonable opportunity to the assessee to represent its case. Therefore, it was submitted that the order was bad in law because it was passed in violation of the principles of natural justice and fair play and without considering the submissions / documents submitted by the assessee. It was prayed that the assessee was in a position to show that the activities were within the scope of its objects and were charitable in nature and the ld. AR therefore, prayed that the matter could be restored back to the file of the ld. CIT(Exemption) to pass a considered order after considering all the facts. Sh. R.K. Agarwal, ld. CIT DR, did not have any objection if the matter was restored to the file of the ld. CIT(Exemption) for passing a fresh order after considering the materials placed before him.

We have duly considered the facts and circumstances of the case. It is seen that the assessee has, after consideration of its objects and activities, already been granted provisional registration on 24.09.2021 which was valid up till assessment year 2024-25. Ongoing through the paper book submitted by the ld. AR, we note that the assessee had submitted details of photographs of activities being undertaken by it towards provision of nutrition to poor children, provision of foodgrains to poor families and provisions of uniforms and shoes to 200 school going children. In addition, the society has submitted that it had provided study materials such as slates, Bhartiya Mahila Evam Gramin Uthan Sansthan A.Y. 2023-24 chatai, stationery for children and solar lamps as also furthered the cause of the environment and economy by providing saplings for plantation. As per the submission made by the ld. AR, these documents were submitted to the ld. CIT(Exemption) but there is no discussion in his order as to how these activities fall outside the ambit of charitable activities or the stated objects of the trust. We also note that the jurisdictional High Court in the case of CIT vs. Red Rose School (2007) 212 CTR / (ALL) 394 has held that section 12AA which lays down the procedure for registration, does not speak anywhere that the ld. CIT(Exemption), while considering the application for registration, shall also see that the income derived by the trust or the institution is either not being spent for charitable purposes or that such institution is earning profit. The language used in the section only requires that the activities of the trust or the institution must be genuine, which accordingly would mean that they are in consonance with the objects of the trust / institution, and are not mere camouflage but are real, pure and sincere and not against the proposed objects. Similarly, in the case of CIT vs. Babu Ram Education Society (2018) 96 tamxan.com 606 (All), the Hon’ble High Court held that registration of the trust does not involve inquiry into the actual activities or application of funds at that stage and the only enquiry that is required to be conducted is with regard to the objects of the trust alone. Only if the assessee is found to have been engaged in any non-charitable activities, could the benefit of exemption be denied in the manner provided under the Act. In the case of Bhartiya Kisan Sangh Seva Niketan vs. CIT (Exemption) (2017) 166 ITD 562 (Del), the ITAT Delhi ‘D’ Bench observed, in a case where the CIT(Exemptions) had rejected the registration on the grounds that assessee had not submitted its books of accounts, that at the stage of granting of registration under section 12A, the ld. CIT(E) was required to see the objects of the assessee and not required to examine the application of income, which would have to be undertaken by the ld. AO on an year to year basis after the assessee files return of income claiming exemption under section 11. In view of the aforesaid facts that were available before 4 Bhartiya Mahila Evam Gramin Uthan Sansthan A.Y. 2023-24 the ld. CIT(Exemption) and the position of law as laid down by the aforementioned judgments, it appears that the ld. CIT(Exemption) has not dealt with the application of the assessee in accordance with the provisions of law. Accordingly, we restore the matter to the file of the ld. CIT(Exemption), with a direction to the assessee to furnish such evidences as it may desire to the ld. CIT(Exemption) to show that it was performing activities in accordance with the objects of the trust and the ld. CIT(Exemption) may thereafter examine the same in the context of the objects of the trust to determine whether the assessee was entitled for registration under section 12AA. As the matter has been restored to the file of the ld. CIT(Exemption), the appeal of the assessee is held to be allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 31.07.2025 in the Open Court.