CIT can’t deny sec. 12AA registration on grounds not related to object & genuineness of trust’s activities: ITAT

Case details: Har Nihal Charitable Trust v. CIT - [2021] 131 taxmann.com 155 (Chandigarh - Trib.)

Judiciary and Counsel Details

• • N.K. Saini, Vice-President and R.L. Negi, Judicial Member
  • Sudhir Sehgal, Adv. for the Appellant. 
  • Smt. C. Chandrakanta, CIT for the Respondent.

Facts of the Case

Assessee-Trust was carrying on charitable activities and applied for registration under section 12AA in Form 10A. However, the Commissioner (Exemptions) rejected the application and denied registration inter alia on the grounds that the assessee had failed to establish that it had been carrying out charitable acts as per the stated object.

On appeal, Tribunal held that assessee had adduced evidence of having carried out charitable activities and restored issue back to file of Commissioner (Exemptions) to reconsider submissions of assessee vis-a-vis charitable activities carried out by it. In the second round of proceeding, Commissioner (Exemptions) had again denied registration under section 12AA, holding that assessee had not paid due taxes on the amount received from a charitable trust.

ITAT Held

On further appeal, the Tribunal held that after examining the issue as per the order of the ITAT, the Ld. CIT (E) had not recorded any adverse observations in the impugned order in respect of the charitable activities carried out by the appellant Trust.

So far as the Tax liability in respect of the corpus donation was concerned, the same was not the issue for determination before the Ld. CIT (E) as the same had already been dealt with by the co-ordinate Bench in the first round of appeal, and no direction was issued to look into the said issue.

Since the Ld. CIT (E) had not given any adverse finding in respect of the charitable activities carried out by the assessee-Trust, the Ld. CIT (E) ought to have granted registration to the assessee-Trust.

List of Cases Referred to

• • State Bank of Hyderabad v. Dy. CIT [IT Appeal No. 449 (Hyd.) of 2015, dated 3-7-2015] (para 4)
  • Cyberstar Education Society v. CIT (Exemptions) [IT Appeal No. 795 (Asr.) of 2017, dated 21-6-2015] (para 4)
  • CIT (Exemptions) v. Kids-R-Kids International Education Social Welfare Trust [2018] 99 taxmann.com 384/[2017] 399 ITR 572 (Punj. & Har.) (para 4)
  • CIT (Exemptions) v. Shri Shiridi Sai Darbar Charitable Trust (Dharamshala) [2017] 81 taxmann.com 49/247 Taxman 260/395 ITR 567 (Punj. & Har.) (para 4)
  • CIT v. Baba Kartar Singh Dukki Educational Trust [2014] 42 taxmann.com 17/221 Taxman 493 (Punj. & Har.) (para 4)
  • Saint Kabir Educational Trust v. CIT [IT Appeal No. 488 (Asr.) of 2009, dated 31-3-2010] (para 4).