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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI SATBEER SINGH GODARA & SHRI INTURI RAMA RAO
This is an appeal filed by the assessee directed against the order of CIT (Exemption), Pune dated 12.10.2023 denying registration u/s.12AB of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act”).
The appellant is a Charitable institution established under the Companies Act, 2013. It is formed with the object of providing aid, support to the downtrodden, abandoned, poor, under privileged, medical relief, education etc. The appellant filed application in Form No.10AB under clause (iii) of section12A(1)(ac) of the Act seeking registration dated 21.04.2023. On receipt of the said application, the ld. CIT, Exemption, in order to verify the genuineness of activities of the appellant issued notice on 27.07.2023 through ITBA portal calling upon the appellant to file certain information/clarification. The appellant duly complied with the same. After consideration of the details/documents furnished by the appellant, the ld. CIT (Exemption) had not satisfied about the nature and the genuineness of the activities carried out by the appellant, accordingly denied the grant of registration u/s.12A(1)(ac)(vi) of the Act.
We heard the rival submissions and perused the relevant material on record. We find the ld. CIT (Exemption) after examining the evidences regarding the Food distribution concluded that the appellant had failed to furnish sufficient details as to how the beneficiaries were identified for the food distribution. Similarly, the ld. CIT (Exemption) observed that most of the grocery bills were in the form of estimates which did not contain even the seller/shop name, signature etc. Regarding the rendition of financial assistance for education activity, the ld. CIT (Exemption) observed that the appellant had only disbursed the aid to the parents instead of the schools directly. In our opinion, the above observations made by the ld. CIT (Exemption) does not lead to conclusion that either the objects are not charitable or the activities of the appellant are non-genuine. They are irrelevant and cannot be looked into at the time of granting the registration. The ld CIT(Exemption) had dealt with the issue of assessment. It is trite law that at the time of grant of registration, the Commissioner of Income Tax is only expected to examine and satisfy himself that the objects of the trust are charitable and its activities are in furtherance of the charitable in nature i.e. satisfy himself about the genuineness of the activities carried on by the assessee as held by the Hon’ble Supreme Court in the case of Ananda Social and Educational Trust Vs. CIT [2020] 114 taxmann.com 693/272 Taxman 7/ 426 ITR 340/[2020] 17 SCC 254. The relevant para of the judgment is reproduced below :
"Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust."
In the light of this judgment, we are of the considered opinion that the ld. CIT(Exemption) ought not to have denied the grant of registration. Accordingly, we direct the CIT(Exemption) to grant the registration u/s.12AB to the appellant.
In the result, the appeal filed by the appellant is allowed. Order pronounced on this 20th day of June, 2024.