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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
Assessee by : Sh. Manish Aggarwal, CA Revenue by: Ms. Nirupama Kotru, CIT DR Date of Hearing 14/02/2017 Date of pronouncement 15/02/2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(Exemption), New Delhi dated 16.04.2014 denying registration u/s 12AA of the Income Tax Act. 2. The assessee has raised the following grounds of appeal:- “i) That the ld DGIT(E) has erred in law and in fact in rejecting the application of the assessee trust for registration u/s 12A. ii) That ld DGIT€ has erred in law and in fact, in holding the trust as non starter while the trust had already initiated the activities by making contribution to PM relief fund. iii) That the rejection of registration u/s 12A of the Income Tax, has been made on the ground that trust has failed to start the business which is not a condition precedent to registration in law and upheld by various high courts including Delhi High Court. iv) That the order was passed at the back of the appellant without providing reasonable opportunity of being heard, while the appellant was regularly appearing before the ld DGIT(E). v) That appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing.”
3. The assessee is a trust formed on 06.06.2012 with the object of education amongst others. It filed an application u/s 12AA of the Income Tax Act for registration on 17.10.2013 before the ld CIT. The ld CIT rejected the application of the assessee holding as under:-
Page 2 of 3 “4. The provisions of section 12AA stipulate the following conditions for registration u/s 12AA of the Income Tax Act, 1961. i. The objects of the trust/ society should be of charitable in nature; ii. the activities of the trust/ society should be genuine.
5. In the absence of any information/ documentary evidence with regard to activities undertaken by the applicant, it is not possible to comment on the nature and genuineness of the activities undertaken by the applicant. Hence, the genuineness of the activities as stipulated in section 12AA(1)(b) could not be established. Therefore, one of the conditions for granting registration u/s 12AA is also not satisfied. Accordingly, the application filed by the applicant for grant of registration u/s 12AA is hereby rejected.”
Therefore, the assessee has filed an appeal before us.
The ld AR submitted the copy of the trust deed as well as supplementary trust deed before us. It also submitted copy of ledger evidencing expenses for construction of school site along with the bills. It further stated that it has also donated sums to the Prime Minister Relief Fund, therefore, the activity has started. He further referred to page No. 35 where a proposal for acquisition of land for construction of school through Delmass Aviation Pvt. Ltd dated 19.03.2013 is also placed on record. Therefore, he stated that as the land acquisition is under process. He submitted that there is no finding that these activities are not genuine. He therefore, submitted that the assessee may be granted registration.
Ld ld Departmental Representative relied upon the order of the ld CIT and stated that in absence of any information the registration application was rejected.
We have carefully considered the rival contentions. The assessee has submitted that a group company Delmass Aviation Pvt. Ltd has already started activity for acquisition of the land as stated in page No. 35 to 44 of the paper book. The balance sheet of the trust admittedly do not exhibit commencement of activity, however, as the land proposed to be acquired by that company is pertaining to the school to be set up by this trust, these facts were not placed before the ld CIT. Therefore, it was held by him that no documentary evidences were furnished with regard to activities of the trust. It also needs to be verified that application for conversion of the land was made in 2013 and whether such land has been converted and received by the appellant trust or not. Therefore, in the interest of justice, we remit the