INCOME TAX ACT, 1961

Section 12AA

Charitable trust - Registration under section 12AA - Denial of registration on ground that return under section 139(4A) was not filed by assessee -

Assessee-trust was established to promote and provide education and even to conduct school for Blind, Handicapped, Orthopedic Disabled, Mentally Retarded, Activity Workshops, Hostels and to help the handicapped students in their development. CIT(E) in his order had observed that assessee trust was required to file return of income as per section 139(4A) since assessee trust had shown receipts exceeding the maximum amount which was not chargeable to tax. CIT(E) was of the opinion that these facts raised serious concern on the genuineness of the activities of the trust to be carried out. Therefore, registration under section 12AA was denied to assessee. Held: The objects of the trust were not disputed by Department nor they have disputed the genuineness of the activities conducted by assessee trust. The only reason for not granting exemption under section 12AA was that the return under section 139(4A) was not filed by assessee and merely non-filing of return under the said provision cannot be the ground to deny registration under section 12AA to assessee when the genuineness of activities was not disputed by the Department. It is well-settled law that at the time of granting registration of trust under section 12AA CIT(E) was required to look into the objects of the trust and activities carried out by trust whether genuine or not and nothing else. Non-filing of return under section 139(4A) cannot be the ground to demonstrate that activities of the trust were not genuine. Therefore, registration under section 12AA should be granted to the assessee trust.

Followed:CIT v. Babu Ram Education Society (2018) 96 taxmann.com 606 (All) : 2017 TaxPub(DT) 5316 (All-HC), Hardayal Charitable & Educational Trust v. CIT (2013) 32 taxmann.com 341 (All) : (2013) 214 Taxman 655 (All) : (2013) 355 ITR 534 (All) : 2013 TaxPub(DT) 1480 (All-HC), CIT v. Red Rose School (2007) 163 Taxman 19 (Allahabad) : 2007 TaxPub(DT) 0989 (All-HC), Fifth Generation Education Society v. CIT (1990) 185 ITR 634 (All) : 1990 TaxPub(DT) 1173 (All-HC) and Mahavir Foundation v. Pr. CIT 2019 TaxPub(DT) 6413 (Ahd-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 80G(5)

SUBSCRIBE FOR FULL CONTENT