|The Tax Publishers2020 TaxPub(DT) 5049 (Pune-Trib)
INCOME TAX ACT, 1961
Where assessee-trust having objects of mainly providing special hospital for eye diseases for common people, sought registration under section 12AA, CIT(E) denied the registration on allegation that activities of assessee were not genuine, since perusal of order passed by CIT(E) showed that there was no doubt raised by him about the charitable nature of the objects of assessee-trust and as scope of enquiry to be conducted by CIT(E) was limited, there was no justifiable reason for CIT(E) to doubt the genuineness of activities of the assessee-trust, therefore, Department was directed to grant registration to assessee.
Charitable trust - Registration under section 12AA - Assessee-trust having objects of mainly providing special hospital for eye diseases for common people - CIT(E) whether justified in denying the registration on allegation that activities of assessee were not genuine
Assessee-trust was registered under Bombay Public Trusts Act, 1950. Main objects of the trust, inter alia, were to provide special hospital for eye diseases for common people and to arrange catrus retina check-up camps, blood camps, etc. Assessee sought registration under section 12AA, which was rejected by CIT(E) on allegation that its activities were not genuine, in as much as the correct income was not disclosed in return of income. On appeal, Tribunal set aside order of CIT(E) observing that scope of enquiry to be conducted by CIT(E) while granting registration under section 12AA was limited and directed CIT(E) to consider application of assessee afresh. However, CIT(E) again rejected the section 12AA application for similar reasons. Held: Perusal of order passed by CIT(E) showed that there was no doubt raised by him about the charitable nature of the objects of assessee-trust. He however, raised doubts about the genuineness of the activities of the trust on ground that certain funds raised by the assessee-trust for the purpose of acquiring fixed assets were not offered to tax and the said income was not reflected in the income and expenditure account of assessee trust. As rightly contended by assessee, said receipts representing contribution towards corpus funds were capital in nature and the same, therefore, were not chargeable to tax. Similarly, the said receipts of capital in nature representing corpus funds were directly taken to the balance sheet by the assessee trust and there was no question of reflection of the same in its Income and Expenditure Account. Keeping in view all the facts of case, there was no justifiable reason for CIT(E) to doubt genuineness of activities of the trust and to deny it registration under section 12AA. Therefore, order passed by CIT(E) was set aside and Department was directed to grant registration to assessee.
Followed:ITO (Exemptions), Ward-2, Pune v. Serum Institute of India Research Foundation [ITA No. 621/PUN/2016] : 2018 TaxPub(DT) 0843 (Pune-Trib).
FAVOUR : In assessee's favour.
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