M/S VIJAYA VAANIJYA ALUMNI,BANGALORE vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE

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ITA 1941/BANG/2017Status: DisposedITAT Bangalore20 June 2019AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(Exemption) failed to consider the provisions of Rule 11AA of the IT Rules when rejecting the 80G application. The CIT's reasons for rejection were not in accordance with the prescribed procedure.

What were the facts?

The assessee, M/s Vijaya Vaanijya Alumni, applied for recognition under Section 80G of the Income Tax Act after obtaining registration under Section 12AA. The CIT(Exemption) rejected the application, stating the trust benefits a specific group (alumni) and thus should not be granted 80G recognition.

What were the issues?

Whether the CIT(Exemption) correctly rejected the 80G application without adhering to the procedure laid down in Rule 11AA. Whether the benefit to a specified group disqualifies an entity from 80G recognition.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B’’ BENCH : BANGALORE

Before: SHRI B.R BASKARAN & SHRI PAVAN KUMAR GADALE

For Appellant: Shri M Krishnamurthy, C.A
For Respondent: Shri E.S Nagendra Prasad, CIT
Hearing: 20.06.2019

O R D E R Per B.R Baskaran, Accountant Member

The appeal filed by the assessee is directed against the order dated 24/7/2017 passed by ld CIT(Exemption),Bengaluru rejecting the application filed by the assessee seeking recognition u/s 80G of the Income-tax Act 1961 (‘the Act’).

2.

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.

3.

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.

4.

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.

5.

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

Order pronounced in the Open Court on 20th June, 2019.

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