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Facts
The assessee, a foundation, filed an appeal against the CIT(Exemption)'s order denying registration under section 12AA. The denial was based on the assessee's Memorandum of Association (MOA) that allowed application of funds outside India, as per clause B(7) and B(14). The assessee argued that no such expenditure had been incurred and subsequently amended its MOA.
Held
The Tribunal noted that the assessee has amended the object clause of the MOA, which was the basis for rejecting the application. Therefore, in the interest of justice, the issue was restored back to the CIT(E) to examine the amended objects and grant liberty to the assessee to file a fresh application.
Key Issues
Whether the denial of registration under section 12AA/12AB by the CIT(E) was justified based on the original MOA, especially after the assessee amended the relevant clauses.
Sections Cited
12AA, 12AB
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Income Tax Appellate Tribunal, ‘C’ BENCH
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated24/09/2024 passed by CIT (Exemption) denying the registration u/s.12AA. 2. Before us it has been stated that assessee is a foundation registered u/s. 8 of the Companies Act 2013 engaged in the social activity for providing necessary nutrition to women during Pratiksha Jhawar Foundation pregnancy till the month of the child birth. The ld. CIT (Exemptions) has denied the application and chose to grant registration stating that in the objects / MOA Point No. B(7), B(14), assessee intends to apply funds outside India. The relevant portion of the said clause of MOI noted in the order reads as under:- “The words in the object "To enter into any arrangements for Indian/foreign collaboration. further studies and training in foreign countries." means to utilise the funds in and outside India. Such objects leave room for any potential future endeavour may be undertaken by the assessee trust with global or foreign body which would require expenditure outside India.”
Before us ld. Counsel submitted that it was categorically stated before the ld. CIT (E) that assessee has not incurred any expenditure outside India till date. However, the assessee has thereafter, passed a Board Resolution to amend the object clause of MOA and later on MOA has been altered following chronology of events have been given for the amendment of object clause of MOA which is as under:-
Sr. Particulars Date No. 1 Board Resolution to amend object 12-08-24 clause of MOA passed on 2 Special Resolution for the same passed 18-09-24 in AGM on 3 CIT(Exemption) order rejecting 24-09-24 registration u/s 12AB passed on 4 Altered MOA e-filed vide Form No. INC - 28-09-24 13 on 5 Board Resolution passed for submitting 04-10-24 GNL-1 & MGT -14 on 6 Filing of GNL -1 with MCA for taking 14-10-24 approval regarding the amended clause from Central Govt. (Specially required for Sec. 8 Companies) 7 Approval of GNL - 1 by MCA 23-10-24 8 Post receipt of approval from Central 24-10-24 Govt. Special Resolution passed in EGM on 9 MGT - 14 for filing of resolutions and 24-10-24 agreements filed with Registrar on 10 Altered MOA re-submitted & e-filed vide 24-10-24 Form No. INC - 13 on 11 Certificate issued by MCA certifying 08-11-24 that the special resolution together with the altered MOA registered on
Since assessee has amended the object clause of MOA which was the basis for rejecting the application by the ld. CIT (E) therefore, in the interest of justice, we deem fit that this issue should be restored back to the file of the ld. CIT (E) to examine the amended / altered objects wherein this clause has been removed and grant liberty to the assessee to file application in this regard and then examine the same afresh on merits and in
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 28th November, 2024.