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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’ LUCKNOW
O R D E R PER T.S. KAPOOR, A.M.:
This is an appeal filed by the assessee against the order of ld. CIT(E), Lucknow dated 24.10.2019.
The ld. AR at the outset submitted that the assessee is a charitable institution and is registered u/s. 12AA of the Income Tax Act,1961 and in this respect invited our attention to Annexure-3 of the paper book where a copy of order u/s. 12A dated 18.3.2019 was placed. The ld. AR submitted that when assessee filed application for registration u/s. 80G(5) of the Act and filed written submission, the ld. CIT(E) did not allow the same by holding that applicant has not enclosed any list and de tails of all students enrolled under R.T.E. Act, 2009. The ld. AR submitted that when the activities of the assessee have been held to be charitable in nature and when the assessee is enjoying exemption u/s. 12AA of the Act, the denial of exemption u/s 80G is not justified. The ld. AR invited our attention to Annexure-5 of the paper book where photographs taken during food distribution during Pandemic were placed. We were taken to Annexure 6 to 7 also where other evidences of charitable activities were placed. The ld. AR placed reliance on an order of Lucknow bench of the Tribunal in where the Tribunal vide order dated 16.05.2019 has allowed registration u/s. 80G under similar facts and circumstances.
The ld. CIT(DR), on the other hand, relied on the order of ld. CIT(E) and argued that ld. CIT(E) has clearly held that the assessee was not serving the society as it was not indulging in charitable activities.
We have heard the rival parties and have perused the material available on record. We find that it is undisputed fact that assessee society has been registered u/s. 12AA of the Act, a copy of registration certificate is available in P.B. As per Annexure-3.The Lucknow Bench of the Tribunal in ITA No. 78/Lkw/2018 vide order dated 16.5.2019 has allowed granting of registration u/s.80G under similar facts and circumstances by holding as under: “5. Heard. We find that the ld. CIT (E) had rejected the application filed by the assessee for approval under section 80G(5)(vi) of the Act, observing that the assessee society is not engaged in any charitable activity; and that the documents furnished by the assessee society shows that the assessee society has not worked towards the performance of the objects set out in the memorandum of the society. Therefore, the assessee society has failed to accomplish the goals set by the law for according the approval. It is an undisputed fact that the assessee has been granted registration under section 12AA(1)(b)(i) of the Act by the ld. CIT(E), Lucknow and the same is still continuing. The registration so granted to the assessee society under section 12AA of the Act is still continuing shows that the activities being carried out by the assessee society are charitable in nature and once the assessee society is in possession of registration under section 12AA of the Act, granting of approval under section 80G(5)(vi) of the Act, in our opinion, is consequential.
6. It is well settled position of law that at the time of granting approval under Section 80G of the Act, what is to be examined is the object of the trust and so far as the aspect of income is concerned, the same can be very well examined by the AO at the time of framing assessment. We note that at the time of granting approval u/s 80G of the Act, only the object of trust is required to be examined and, therefore, assessee's application seeking approval u/s. 80G(5) of the Act could not be rejected on ground that the assessee society is not engaged in charitable activities.
In ‘Hiralal Bhagwati vs. CIT’ (supra), the Hon'ble Gujarat High Court has held that once the registration under section 12A(1) of the Act was granted, the Income Tax Officer was not justified in refusing the benefits on the ground that it was not for the benefit of the public at large.
In ‘ACIT vs. Surat City Gymkhana’ (supra), the Hon'ble Supreme Court held that ‘the registration of a trust under section 12A of the Income-tax Act, 1961, once done is a fait accompli and the A.O cannot thereafter make further probe into the objects of the trust’.
In this view of the matter, we set aside the order of the ld. Commissioner of Income-tax and restore the matter to his file for re- adjudication of the request of the assessee for approval under section 80G(5) of the Act, as per law.
In the result, for statistical purposes, the appeal of the assessee is allowed.
In view of the above, we direct the ld. CIT(E) to re-adjudicate the request of assessee for approval u/s.80G(5) of the Act.
In the result, the appeal of the assessee is allowed for statistical purposes.