M/S VINUSHRI NANJESH JANASEVA TRUST ,MYSORE vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS) , BANGALORE

O R D E R Per Shri Jason P Boaz, A.M. :

This appeal by the assessee is directed against the order of CIT(E), Bangalore, passed u/s 80G(5)(vi) of the Income Tax Act, 1961 (in short ‘the Act’) dated 23.05.2018 rejecting the assessee’s application for grant of recognition u/s 80G of the Act.

Page 2 of 5 2.1 The assessee-trust, established vide Registered Trust Deed dated 23.01.2014, applied for grant of recognition u/s 80G of the Act vide application dated 15.11.2017. The CIT(E) vide the impugned order dated 23.05.2018 rejected the assessee’s application, inter alia, on the ground that the assessee failed to enclose copy of registration granted u/s 12A along with Form 10G as mandated u/Rule 11AA(2)(i) of IT Rules, 1962.

3.1 Aggrieved by the order of the CIT(Exemption), Bangalore, u/s 80G(5)(vi) of the Act, dated 23.05.2018, rejecting its application for grant of recognition u/s 80G of the Act, the assessee-trust has field this appeal before the Tribunal, wherein it has raised the following grounds:

1. The order of the Ld. Commissioner of Income Tax [Exemption], in so far as it is against the appellant, is opposed to law, equity, weight of evidence, probabilities facts and circumstances of the case.

2. The Ld. Commissioner of Income Tax[Exemption]. is not justified in refusing to grant recognition u/s 80G of the Income-tax Act, 1961, on the ground that the appellant has not complied the requirements of Rule 11AA(2)(i) under the facts and in the circumstances of the appellant's case.

3. The Ld. Commissioner of Income Tax [Exemptions] ought to have appreciated that the objects of trust are charitable in nature in as much as the TRUST has been granted registration u/s. 12AA of the Act and consequently, the impugned order passed by the Ld. Commissioner of Income Tax [Exemptions] deserves to be cancelled and the appellant requires to be granted recognition u/s.80G of the Income Tax Act ,1961.

4. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.

Page 3 of 5 3.2 The learned AR for the assessee was heard in support of the grounds raised. According to the learned AR, the basic reason for the CIT(E) rejecting the assessee’s application for grant of recognition u/s 80G of the Act was that the assessee had failed to file / enclose a copy of the Certificate granting it Registration u/s 12A of the Act. It is submitted that the assessee had filed application for Registration u/s 12AA of the Act on 15.11.2017 and along with the said application has also filed the application for grant of recognition u/s 80G of the Act in Form No. 10G and therefore it was impossible for the assessee to have complied with the CIT’s requirements. The learned AR brought to the notice of the Bench that the very same CIT(E) has granted the assessee registration u/s 12AA of the Act vide order No. ITBA/EXM/S/12AA/2018 – 19/1009970504(1) dated 29.05.2018 (copy filed); a mere 6 days after rejecting the assessee’s application for grant of recognition u/s 80G of the Act. It is submitted that in these circumstances, the impugned order of the CIT(E) be set aside and the matter be restored for proper consideration of the assessee – trust’s application for grant of recognition u/s 80G of the Act.

3.3 Per contra, the learned DR supported the order of the CIT(Exemptions).

3.4.1 We have heard the rival contentions and perused and carefully considered the material on record. The facts of the matter, regarding the assessee’s application for grant of recognition u/s 80G of the Act, as emanate from the record, are that the assessee filed an application for grant of registration u/s 12AA of the Act on 15.11.2017, along with its application for grant of recognition u/s 80G of the Act also dated 15.11.2017. The CIT(E) rejected the assessee’s application for grant of recognition u/s 80G of the Act vide the impugned order dated 23.05.2018, inter alia, on the ground that the assessee-trust failed to file copy of its certificate of registration u/s 12AA; oblivious to or ignoring the fact that this requirement was impossible to comply with; as the assessee’s application for recognition u/s 12AA of the Act was filed on 15.11.2017 was also pending disposal along with its application for grant of Page 4 of 5 recognition u/s 80G of the Act and was available with his office. As submitted by the assessee, we find that the same CIT(E), 6days later, i.e., vide order dated 29.05.2018 granted the assessee registration u/s 12AA of the Act (a copy of which has been placed on record).

3.4.2 In these factual circumstances of the case on hand, as discussed above, we are of the considered view that the impugned order of the CIT dated 23.05.2018, rejecting the assessee’s application for grant of recognition u/s 80G of the Act for failure to perform an impossible requirement; i.e., of enclosing a copy of the Certification of Registration u/s 12AA of the Act which was subsequently issued on 29.05.2018 by the same CIT; is unsustainable and liable to be set aside. In this view of the matter and in the interest of substantial justice, we set aside the CIT’s order dated 23.05.2018 rejecting the assessee’s application for grant of recognition u/s 80G of the Act and restore the matter of grant of recognition u/s 80G to his file for fresh consideration and adjudication thereon, after, inter alia, taking into consideration the fact that the assessee trust has been granted registration u/s 12AA of the Act vide order No. ITBA/EXM/S/12AA/2018 – 19/1009970504(1) dated 29.05.2018. Needless to add, the CIT shall afford the assessee reasonable opportunity of being heard and to file details/submissions required, which shall be duly considered by Revenue while deciding the matter. We hold and direct accordingly.