M/S CATHOLIC WOMENS LEAGUE ,BANGALORE vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS) , BANGALORE

We have heard the parties and perused the record. We noticed that the assessee has been granted registration u/s 12AA of the Act, vide order dated 18/9/2018 and passed by ld CIT(E) in Order No.ITBA/EXM/S/12AA/2018-19/1012303266(1).

After receipt of registration u/s 12AA of the Act, the assessee trust filed an application before ld CIT(E) seeking recognition u/s 80G of the Act. However, the ld CIT(E) rejected the application by observing that the assessee trust has not carried out sufficient activities and hence, in the absence of the same, it is not possible for him to verify the genuineness of objects and the activities of trust. Accordingly he rejected the application filed by the assessee.

Before us, the Ld A.R submitted that the assessee is providing scholarships to poor students for the past several years. In support of the same, he invited our attention to the copies of financial statements for financial years 2015-16 to 2017-18 in the paper book. Accordingly he submitted that the Ld CIT(E) has not examined these details and hence he was not justified in observing that the assessee has not carried out sufficient activities. On the contrary, the Ld D.R supported the order passed by Ld CIT(E).

We have already noticed that the assessee has been granted registration u/s 12AA of the Act. Provisions of sec. 80G(5)(iv) state that the registration u/s 80G is granted by the Commissioner in accordance with the Rules made in this behalf. Rule 11AA prescribes the procedure to be followed for granting recognition u/s 80G of the Act. We noticed that the ld CIT(A) has not referred to provisions of Rule 11AA of the I T rules in order to examine the application filed by the assessee. Further, we notice that the assessee has furnished the details of scholarship given by it in Financial year 2017-18 in the paper book and has also furnished financial statements of earlier years in order to show that such kind of scholarships are given year after year. We notice that the Ld CIT(A) has not examined those details. Hence, we are of the view that the reasons cited by the ld CIT(A) for rejecting the application of the assessee is not in accordance with Rule 11AA of the Act. Accordingly we set aside the order passed by the ld CIT(E) and restore the same to his file for examining the application of the assessee afresh, after affording adequate opportunity of being heard to the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.