VIZINANAGARAM ROTARY PARVATI DEVI ANCHALIA VOLUNTARY BLOOD BANK TRUST,VIZIANAGARAM vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), HYDERABAD

Brief facts of the case are that the assessee filed an application before the Ld.CIT(E) in Form No.10G seeking approval u/s 80G of the Income Tax Act, 1961 (in short ‘Act’) on 30.03.2019. The Ld.CIT(E) issued a notice dated 14.08.2019 to the assessee to appear and produce it’s original Memorandum of Association (MoA) / Trust Deed for verification and to furnish a detailed reply on specific points. The Managing Trustee appeared before the Ld.CIT(E) and submitted that the assessee is in the process of setting up of blood bank, and applied to the competent authority for approval. Relying on the decision of Hon’ble ITAT, Cochin in the case of Progressive Educational & Charitable Trust Vs. CIT in the Ld.CIT(E) dismissed the appeal of the assessee as there is no charitable activity carried out by the assessee for grant of approval u/s 80G of the Act and rejected the application in Form No.10G. The Ld.CIT(E) also rejected the assessee’s application for registration u/s 12A which is mandatory for granting approval u/s 80G.

On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds :

2. The Learned CIT(E) ought to have seen that the appellant is in fact carrying on charitable activities as per the objects of the Trust.

On the other hand, the Ld.DR submitted that there is no evidence that the assessee society is carrying out any charitable activity as prescribed in the application, though the license was granted on 13.12.2019. Therefore, the Ld.CIT(E) has rightly denied the registration u/s 12A.

We have heard both the parties and perused the material available on record. There is no dispute that running a blood bank is a charitable activity. But the only grievance of the revenue is that the assessee has not started the activity on the date of filing of the application. On this aspect, the contention of the assessee is that without constructing the laboratory, it is difficult to run blood bank. Further contention of the assessee is that on 13.12.2019, the license was granted and immediately the assessee started it’s charitable activity. After considering the arguments of the assessee as well as the revenue, we are of the firm view that without laboratory it is difficult to run a blood bank. There is no proof to establish that the assessee has been running a blood bank after issuance of license by the competent authorities. Therefore, we remit the matter back to the file of the CIT(E) to examine and grant 12A registration from the date of application, if the assessee is carrying the charitable activity from 13.12.2019, otherwise, the assessee is not entitled for grant of registration u/s 12A.

In the result, the appeals of the assessee are allowed for statistical purpose.