INCOME TAX ACT, 1961

Section 12AA Section 80G

Charitable trust - Denial of registration under section 12AA - Allegation that no activities were started by assessee -

Assessee-trust filed application in Form 10A seeking registration under section 12AA. DIT(E) called for certain particulars and in the reply it was stated that no activities have commenced. Therefore, the DIT(E) was not able to verify the objects of the trust and genuineness of the activities carried on by the trust as mentioned in 12AA (b). Therefore, DIT(E) rejected the application filed by assessee for the grant of registration under section 12AA. Tribunal directed the DIT(E), to grant registration of trust under section 12AA as also grant approval under section 80G. Held: When the genuineness of the objects of the trust were not questioned by the CIT and when the Trust was yet to commence its operation and when a subject-matter of scrutiny by the CIT, as contemplated under section 12AA(3), the revenue would not be justified in refusing the registration at the threshold. The said ratio was laid down in a judgment of CIT v. Arulmighu Sri Kamatchi Amman Trust (2012) 206 Taxman 69 and following the ratio laid down in the said judgment, the Court directed the CIT to register the trust.

Followed:Ananda Social & Educational Trust v. CIT & Anr. (2020) 114 Taxmann.com 693 (SC) : 2020 TaxPub(DT) 1340 (SC), CIT v. Karaikudi ILM Educational Trust [T.C.A.Nos.401 And 402 of 2011, dt. 22-2-2021] and CIT v. Arulmigu Sri Kamatchi Amman Trust [Tax Case Appeal No.643 of 2011, dt. 25-1-2012].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

SUBSCRIBE FOR FULL CONTENT