RAJESWARI AMMAIYAR MEMORIAL TRUST,CHENNAI vs. ITO, COIMBATORE

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ITA 2709/CHNY/2014Status: DisposedITAT Chennai03 February 20166 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the objects of the trust can be achieved over time and the assessee had proven its charitable nature by obtaining 12AA registration. Therefore, the rejection order was quashed.

What were the facts?

The assessee trust, registered under Section 12AA, applied for approval under Section 80G. The CIT rejected the application, stating that the trust had not undertaken significant activities towards its main objects even after seven years.

What were the issues?

Whether the CIT erred in rejecting the 80G approval application based on the perceived lack of activity, despite the trust having 12AA registration and charitable objects.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI CHANDRA POOJARI & SHRI G. PAVAN KUMAR

For Respondent: Shri. D.N. Karr, IRS, CIT

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

1.

The appeal filed by the assessee emanates from the order of the Commissioner of Income-tax I, Coimbatore in rejecting Approval u/sec. 80G(5) (vi) of the Act vide order C.No.127(262)CIT- I/Cbe/2013-14, Dated 12.06.2014.

ITA No.2709/Mds/2014. :- 2 -:

The only substantive ground raised by the assessee that CIT 2. erred in rejecting the application for grant of recognition u/s80G of the Act and were trust was granted registration u/s.12AA of the Act.

Before we proceed for hearing, there is delay of 73 days in 3. filing the appeal. The ld. Authorised Representative of the assessee filed condonation petition and explained the circumstances for delay which are not deliberate but due to unforeseen circumstances.

Further, the ld. DR has no serious objection for condonation of delay.

After hearing the submissions, we are satisfied with reasonable cause submitted in affidavit for filing the appeal belatedly. Therefore the delay is condoned and appeal is admitted.

The Brief facts of the case are that the assessee is a trust 4. registered on 10.07.2007 at Ganapathy, Coimbatore and the main objects of the trust fall under criteria of charitable purpose for under Income Tax Act. The trust was constituted and applied for registration u/s.12AA of the Act on 30.08.2011 and was rejected. Against the rejection order, the assessee filed an appeal before the Tribunal. The Tribunal by its order dated 29.05.2012 in has considered the objects of the trust and dealt that the trust was constituted to comply with the objects as per trust deed and directed

ITA No.2709/Mds/2014. :- 3 -: the CIT to grant registration u/s.12AA of the Act. Accordingly, the trust was granted 12AA registration from 01.04.2011 as per the orders of CIT-I, Coimbatore in C.No.127(262)12A/CIT-I/CBE/2011-12, Dated 23.07.2012.

Subsequent to 12AA registration the assessee e-filed 5.

Income Tax Return with taxable income � Nil for the assessment year 2014-2015 declaring contributions and expenditure incurred in compliance to Sec.11 of the Act. The assessee made an application in form No.10G alongwith enclosures with the office of CIT-I, Coimbatore for grant of approval under Sec.80G of the Act. In the hearing proceedings on 21.05.2014 and 05.06.2014, the ld. Authorised Representative and trustee of the Trust appeared and furnished trust deed, 12AA registration details and submitted financial statements.

The ld.CIT on verification of the information found that the assessee trust has not take up any activities towards main objects even after seven years of inception. The ld. CIT on the presumption that assessee has not carried out any significant activities towards their objectives and unilaterally concluded that the application is premature and genuiness of activities are not satisfactory and rejected the approval u/sec. 80G(5)(vi) of the Act. Aggrieved by the order of the CIT the assessee filed an appeal before the Tribunal .

ITA No.2709/Mds/2014. :- 4 -:

6.

Before Tribunal, the ld. Authorised Representative reiterated submissions made before the CIT, Coimbatore and submitted that the Commissioner of Income Tax has wrongly erred in rejecting the application without any proper reasons though assessee has complied with the conditions for recognition under 80G of the Act. The CIT on perusal of the registered trust deed found that the objects of the trust are charitable but on the activities of the trust he has dissented. The assessee trust filed return of income for the assessment year 2014- 2015 and the Accounts of the trust are Audited by Chartered Accountant and Audit report under From 10B was obtained. The ld. Authorised Representative furnished the financial statements, balance sheet and receipt and payment account of the trust. Further submitted that the trust was granted registration u/Sec. 12AA of the Act on 23.07.2012 by CIT effective from 01.04.2011 and pleaded that the ld.CIT has rejected the 80G recognition without giving proper reasons and justification and also no opportunity was provided before passing the impugned order in violation of principle of natural justice and pleaded for grant of 80G recognition.

7.

Contra the ld. Departmental Representative relied on the order of the Commissioner of Income Tax and pleaded for dismissal of appeal.

ITA No.2709/Mds/2014. :- 5 -:

8.

We heard the submissions of both the parties and perused the material on record. The ld. Authorised Representative submitted that the trust was registered and obtained 12AA registration from Commissioner of Income Tax vide proceedings in C.No.127(262)12A/CIT-I/CBE/2011-12, Dated 23.07.2012 based on direction of Tribunal IN ITA No. 688/Mds/2012. The trust objects are charitable in nature and could not commenced its activities immediately and filed return of income for the assessment year 2014- 2015. The Accounts are Audited and Auditors report in form 10B was filed with the Income Tax Department. The ld. Authorised Representative drew attention to the Audited Receipts & Payments and also income and expenditure account. We found the Trust has received donations and also incurred expenditure as per provisions of Sec.11 of the Act and there is no dispute or any violation of provisions applicable for charitable trust. The ld.Commissioner of Income Tax only apprehension that the assessee trust has not taken up any main objects of the Trust even after seven years, but we are of the opinion that objects of the Trust can be achieved over a period of time and the assessee has proved to the satisfaction of the Department that the Trust activities are charitable in nature which is not disputed and was granted 12AA registration in earlier years. Considering the facts on ITA No.2709/Mds/2014. :- 6 -:

record we squash the rejection order of Commissioner of Income Tax and direct to grant recognition u/s.80G of the Act to the assessee.

9.

In the result, the appeal of the assessee in is allowed.

Order pronounced on Wednesday, the 3rd day of February, 2016, at Chennai.

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