M/S. REGIONAL CENTRE FOR DEVELOPMENT COOPERATION (RCDC),BHUBANESWAR vs. CIT (EXEMPTIONS), HYDERABAD

The assessee is aggrieved by the rejection of application for The assessee is aggrieved by the rejection of application for The assessee is aggrieved by the rejection of application for registration under section 80of the Income tax Act, by the ld CIT(E), registration under section 80of the Income tax Act, by the ld CIT(E), registration under section 80of the Income tax Act, by the ld CIT(E), Hyderabad.

Facts of the case are that the appellant is a society registered under the Societies Registration Act 1960 vide Registration No.4920-844 of 1992- 93 dated 17.3.1993. The appellant society is also registered u/s.12AA of the Income tax Act, 1961. The assessee applied for approval u/s.80G of the Act. The CIT (E) rejected the application on the ground that earlier also the application in Form 10G for approval u/s.80G was rejected for the reason that the assessee trust is not utilizing the funds for fulfillment of the objects of the society and also for transfer of funds to the relatives of the officer bearers.

Ld A.R. of the assessee submitted that the trust is making payment to the relatives of the office bearers in the nature of rent and some payments were made for purchase of air tickets in India for attending a workshop/seminar in Bangaladesh. Ld A.R. submitted that no violation under section 11(1)(c) has been recorded by the AO while making assessment u/s.143(3) of the Act. He also submitted that the expenditure incurred for purchasing air ticket is an assessment issue and not for rejecting the application for grant of 80G. He submitted that the assessee is registered u/s.12AA of the Act and, therefore, the ld CIT(E) be directed to grant registration u/s.80G of the Act. He has submitted that while granting approval under section 80G, the Commissioner is required to satisfy the prescribed conditions which he has not doubted in the present case. He has, therefore, submitted that approval under section 80G may be granted to the assessee.

Ld A.R. of the assessee referred to the decision of ITAT Lucknow in ITA No.666/LKW/2017 order dated 16.11.2018 in the case of Samekit Mahila Evam Bal Vikas Sansthan vs CIT (Exemption), wherein, it has been held that once registration has been granted u/s.12A(a) of the Act, and it continues hitherto, the ld CIT(E) erred in rejecting the application u/s 80G(5) of the Act. He also relied on the decision of ITAT Cuttack in the case of Manav Adhikari Seva Samiti Society vs CIT (Exemption) in ITA No.249/CTK/2019 for the assessment year 2018-19 order dated 21.12.2021, wherein also, following the decision of ITAT Lucknow Bench in the case of Samekit Mahila Evam Bal Vikas Sansthan(supra), the Tribunal has directed the ld CIT(E) to grant registration u/s.80G of the Act.

Replying to above, ld CIT DR supported the order of ld CIT(E). He submitted that the objective of the trust is not charitable and the expenditure is incurred for purchase of air tickets and also some payments have been given to the office bearers of the trust. Therefore, there is no reason to interfere with the order of the ld CIT(E).

After considering the rival submissions, we are of the view that Order under section 80G(5) denying approval to the assessee cannot be sustained in Law. It is not in dispute that assessee has been granted registration under section 12AA of the I.T. Act, 1961 by the CIT, Bhubaneswar vide Order Dated 13.4.1994. The Ld. CIT was satisfied with the objects and activities of the assessee that it is meant for charitable P a g e 3 | 6

On perusal of assessment orders u/s.143(3) of the Act for the assessment yearsv2013-14, 2015-16 & 2016-17 and also scrutiny assessments for other assessment years i.e 2011-12, 2012-13,. 2017-18, 2018-19, 2019-20, we also observe that the Assessing Officer has not doubted the genuineness of the activities of the Trust.

We find that the Hon’ble Gujarat High Court in the case of In "Hiralal Bhagwati vs. CIT", 246 ITR 188 (Guj.) has held that that once registration u/s 12AA of the Act was granted, the order rejecting the application u/s 80G(5) of the Act was liable to be quashed. The Hon’ble High Court took into account the submissions that once registration u/s 12A of the Act is granted, a grant of benefits under the act cannot be denied; that the ITO was not justified in refusing the benefits under the act which would otherwise accrue under the registration; that if there was no registration, the Revenue would have been justified in submitting that the benefit cannot be granted, but where the application for registration is submitted and the registration has been granted, the benefit cannot be denied.

We also find that the Hon’ble Gujarat High Court In "N.N. Desai Charitable Trust vs. CIT", 246 ITR 452 (Guj), held, inter alia, that while

The Lucknow Bench in the case of Samekit Mahila Evam Bal Vikas Sansthan(supra) following the judgements cited (supra) has taken the similar view that once the registration u/s.12A has been granted, there is no reason to deny registration u/s.80G(5) of the Act.

Similar view has also been taken by the Co-ordinate Bench of Cuttack ITAT in the case of Manav Adhikari Seva Samiti Society (supra).

Considering the totality of the facts and circumstances of the case in the light of above decisions relied upon by the Learned Counsel for the assessee, we are of the view that assessee is entitled for approval under section 80G of the I.T. Act, 1961, from the date of application. We, accordingly, set aside the impugned Order and direct the Ld. CIT(E),

In the result, appeal of the assessee is allowed.

DR, ITAT, Cuttack 4. Guard file. //True Copy// By order