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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: Shri Waseem Ahmed & Shri K. Narasimha Chary
Per Shri K. Narasimha Chary, J.M.: These are the appeals by the Assessee challenging the order dated 28.10.2015 passed by the learned Commissioner of Income Tax (Exemptions), Kolkata (hereinafter referred to as “learned CIT”). Both the appeals are heard together and are being disposed of by this common order. 2. Brief facts of the case are that the assessee is a Trust formed with the objects of promoting, establishing, equipping, erecting, maintain and /or granting all or other financial assistance to schools, colleges, medical colleges, engineering and technical colleges, international school for higher studies, International Business School, University, Deemed University, Media Science, Film & TV activity, dispensaries, hospitals, laboratories, hostels, public rest houses, libraries and any other similar works for furtherance and dissemination of & 03/KOL./2016 Abacus Foundation Page 2 of 4 education in general medical/engineering and/or any other streams. It came into existence through a Deed of Trust dated 22.12.2014. The Trust filed an application in Form 10G on 07.04.2015 before the ld. CIT (Exemptions), Kolkata seeking registration but the Registration under section 12AA was rejected by the ld. CIT vide order dated 28.10.2015 holding that the activities of the Trust were found to be bare minimum to justify the claim of Registration under section 12AA. Aggrieved by the said rejection, the assessee filed an appeal before the Tribunal in on the following grounds:- (1) That on the facts and circumstances of the case, the ld. CIT(Exemptions) ought to have granted the approval u/s 80G of the Income Tax Act, 1961 to the assessee-Trust.
(2) That on the facts and circumstances of the case, the ld. CIT (Exemption) ought to have considered the fact the assessee Trust is in its ignition period and had started its activities, which warranted approval u/s 80G.
The registration under section 80G(5)(vi) was also denied on the same day as a consequence of rejection of the application in Form No. 10A.
Aggrieved by the rejection of the registration under section 80G, the assessee carried the matter in appeal before the Tribunal in on the following grounds:- (1) That on the facts and circumstances of the case, the ld. CIT(Exemptions) ought to have granted the initial exemption u/s 12AA of the Income Tax Act, 1961 to the assessee-Trust.
(2) That on the facts and circumstances of the case, the ld. CIT (Exemption) ought to have considered the fact that the assessee Trust is in its ignition period and had started its activities, which warranted granting of exemption under section 12AA.
It is the argument of the ld. A.R. that while granting the registration to the assessee, which is at the commencement stage, the powers of ld. CIT with whom the application is filed, are limited to the aspect of examining that whether or not the objects of trust are charitable in nature and since the Trust was formed on 22.12.2014 and the application for registration was made on 07.04.2015, though the activities commenced to some extent, there were less & 03/KOL./2016 Abacus Foundation Page 3 of 4 as such is not open for the ld. CIT to go into the quantitative aspect of the activities of the Trust.
In a decision rendered by a Coordinate Bench of Delhi Tribunal in the case of Dharma Sansthapak Sangh (Nivas) –vs.- CIT (2008) 118 TTJ (Del.) 823, it is held as follows: 10. The law is now well-settled that while granting the registration to the charitable institution or trust, if it is at the commencement stage, the powers of CIT, with whom the application is filed by such trust/institution, are limited to the aspect of examining that whether or not the objects of trust are charitable in nature and this well established law is supported by the decisions relied upon the learned Authorised Representative and referred to in the earlier part of the order. It has already been observed that objects of trust, which are religious, are charitable in nature. Thus, assessee also fulfils such condition. The carrying of charitable activity at the stage of commencement of institution is not relevant to decide that whether such trust/ institution is entitled for registration. So long the objects of the trust are charitable in nature, registration cannot be refused, if the trust is genuine. Therefore, we find no material on record to justify the action of the CIT vide which the assessee trust has been refused for grant of registration. We direct CIT to grant registration to the CIT (sic-assessee-trust). The appeal filed by the assessee is allowed."[Emphasis supplied] While deciding the appeal in the above case, the Tribunal took into consideration the decisions of Tribunal in the cases of Acharya Sewa Niyas Uttaranchal vs. CIT [(2006) 105 TTJ (Del) 761] and Modern Defence Shikshan Sansthan vs. C.I.T. [(2007) 108 TTJ (Jd) 732]. Facts of the present case before us being identical to the case referred to above, we respectfully following the decision of the Tribunal in the case of Dharma Sansthapak Sangh (Nivas) vs. CIT (supra) direct the D.I.T. (Exemption) to grant registration to the assessee-trust u/s. 12AA of the Act and also grant exemption certificate u/s. 80G of the Act."
In the decisions rendered by Coordinate Benchs in the case of Vivekananda Welfare Trust –vs.- DIT(E) in and 27/KOL/2009, order dated 23.01.2009, M/s Ginia Devi Todi Charitable Trust, Kolkata Vs Director of Income Tax ITA 738/Kol/2010, dated 1.6.2011, Bani Mittra Charitable Trust, Kolkata Vs. Director of Income Tax ITA 1154&1155/Kol/2009, dated 25.8.2009 the same conclusion was reached by following the earlier decision of ITAT, Delhi in the case of Dharma Sansthapak Sangh (Nivas) (supra). The facts of this case are squarely covered by the decision cited above. Respectfully following the judicial reasoning, we direct the ld. CIT to grant registration to the assessee-Trust under section & 03/KOL./2016 Abacus Foundation Page 4 of 4 12AA of the Act and also to grant exemption certified under section 80G of the Act.
In the result, both the appeals of the assessee are allowed. Order pronounced in the open Court on September 23, 2016.