AASHANA FOUNDATION ,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

Aggrieved by rejection of application for registration u/s. 12AA of the Income tax Act, 1961 by learned Commissioner of Income Tax (exemptions) vide order dated 23/05/2018, the assessee is in further appeal before us. None has appeared for assessee. A perusal of the order sheet entries reveals that assessee has failed to appear on various earlier occasions. Therefore, left with no option, the appeal is proceeded with ex- parte qua the assessee. 2.1 Facts on record would reveal that the assessee Society filed application for registration u/s. 12AA in prescribed Form No.10A on 27/11/2017. Upon perusal of documents furnished by the assessee in support of registration, it transpired that the assessee entered into a service level agreement with ICICI Lombard General Insurance Company Limited which prima facie, showed that the assessee was in the business of capacity building of individuals through skill development and income generation programmes. The comprehensive reading of the agreement revealed that it was a commercial contract on commercial terms. It also transpired that the only activities undertaken by the assessee during the past three financial years, were providing services to ICICI Lombard General Insurance Company Ltd. 2.2 The assessee laid emphasis on the fact that it was a trust registered under the Maharashtra Public Trust Act and recognized by the Charity Commissioner, Mumbai. It was also stated that the assessee was appointed by ICICI Lombard GIC Ltd. as they did not have their own infrastructure to fulfill the obligation with respect to their Corporate Social Responsibility program (CSR) and therefore, the assessee was eligible to lay claim on registration u/s 12AA. 2.3 However, not satisfied with assessee’s explanation, Ld. CIT(E) reached a conclusion that the assessee was doing business activity and providing services on commercial terms in a systematic manner. Therefore, the activities could not be said to be of charitable nature as mandated in Section 2(15) of the Act and therefore, the assessee was not entitled for registration u/s 12AA of the Act. Accordingly, the registration application was rejected. Aggrieved, the assessee is in further appeal before us. 3. Upon careful consideration of factual matrix as noted by Ld. CIT(E) in the order, we find no reason to deviate from the same. The activities carried out by the assessee as rightly been held to be of non-charitable in nature. 4. In the result, the appeal stands dismissed.