M/S VIJAYA VAANIJYA ALUMNI ,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 26/9/2016 and passed by ld CIT(E) in File No.CIT(E)BLR/12A/N- 349/AACTV1008K/ITO(E)-2/Vol 2016-2017 dated 26/9/2016.

After receipt of registration u/s 12AA of the Act, the assessee trust applied 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 is existing for the benefit of specified targeted group viz., Alumni batches of Vijaya College students. Accordingly he took the view that assessee should not be granted recognition u/s 80G of the Act and accordingly rejected the application filed by the assessee.

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. 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.