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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM
Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Exemption), Kochi dated 30.01.2024 passed u/s. 12AA of Income Tax Act, 1961 (hereinafter "the Act").
Brief facts of the case are that the assessee is a trust formed with the object of running a church established on 07.02.1957. The assessee trust was given provisional registration on 28.02.2023 in Form 10AC. The assessee had filed an application in form 10AB u/s.
On receipt of the said application, the learned CIT (Exemption), Kochi has called for certain details in order to satisfy himself as to the genuineness of the activities carried on by the assessee trust and found that there was variations in the value of the buildings shown in the Balance Sheet of Rs. 2,13,98,558/- as against the value shown at Rs. 2,03,37,049/-. Therefore, the CIT (Exemption) denied grant of registration u/s. 12A of the Act.
Being aggrieved, assessee is in appeal before the Tribunal.
We heard the rival submissions and perused the material on record. The only issue in the present appeal is whether the learned CIT (Exemption) is justified in refusing to the grant of registration u/s 12AA of the Act. Now, it is a settled position of law that at the time of grant of registration, the Id. CIT, Exemption can only look into two aspects i.e. (i) whether the objects of the trust or society are charitable in nature and (ii) genuineness of the activities of the trust or society in the light of the law laid down by the Hon'ble Apex Court in the case of Ananda Social and Educational Trust vs. CIT, 272 Taxman 7. It is also equally settled position of law that the grant of registration and assessment are two separate and distinct procedures prescribed under the Income Tax Act. The issues of assessment cannot be considered at the time of grant of registration as held by the following decisions :-
(i) Fifth Generation Education Society vs. CIT, 185 ITR 634; (ii) Shantagauri Ramniklal Trust vs. CIT, 239 ITR 528; (iii) M. Visvesvaraya Industrial Research And Development Centre vs. ITAT, 251 ITR 852; (iv) New Life in Christ Evangelistic Association vs. CIT, 246 ITR 532; (v) N.N. Desai Charitable Trust vs. CIT, 246 ITR 452; and, (vi) CIT vs. Vijay Vargiya Vani Charitable Trust, 369 ITR 360.
On perusal of the impugned order it would be evident that the learned CIT (Exemption), while considering the application for grant of regular registration, had considered the issues which are relevant for assessment proceeding. It is the trite law that the registration proceeding and assessment proceeding are distinct and separate. At the time of grant of registration the CIT (Exemption) can only look into the objects of the trust or the area, specified u/s. 12AB(4) of the Act, which came into force w.e.f. 01.04.2021. Thus, in our considered opinion the CIT (Exemption) had travelled beyond the power provided u/s. 12AB(4) of the Act. Therefore, we are of the considered opinion that the interest of justice would be met, if the matter is restored back to the CIT (Exemption) for de novo disposal of the application in accordance with law after affording reasonable opportunity of hearing to the assessee.