INCOME TAX ACT, 1961

Section 12AA

Charitable trust - Registration under section 12AA denied - Allegation that assessee had failed to file evidence in support of the expenditure incurred on charitable objects -

Assessee was engaged in carrying out activities such as conducting workshops in schools/colleges, creating awareness for de-addiction, tobacco free school project, conducting skill development programmes, organising Tree plantation programmes, clothes distribution, etc. Assessee filed an application for grant of registration under section 12AA. CIT(E) on perusal of said application, issued a letter through ITBA portal calling upon assessee-society to file certain information/clarification. CIT(E) held that the assessee had failed to file evidence in support of expenditure incurred on the charitable objects. CIT(E) held that the genuineness of activities of the trust cannot be examined and, accordingly, rejected grant of registration under section 12AA. Held: Exercise undertaken by CIT(E) by calling for the evidence in support of the expenditure was beyond scope of his powers vested with him under section 12AA and furthermore the proof of the expenditure was an item of assessment. The grant of registration and the assessment of income of the trust are two different and distinct procedures prescribed under the Act. CIT(E) had lost sight of distinction between the process of registration and the exemption or assessment of income under section 11. Reasoning given by CIT(E) cannot be sustained in law and was directed to grant the registration under section 12AA.

Relied:Ananda Social And Educational Trust v. CIT & Another (2020) 272 Taxman 7 (SC) : 2020 TaxPub(DT) 1340 (SC) CIT v. Vijay Vargiya Vani Charitable Trust (2014) 369 ITR 360 (Raj) : 2014 TaxPub(DT) 4152 (Raj-HC) M. Visvesvaraya Industrial Research And Development Centre v. ITAT & Others (2001) 251 ITR 852 (Bom) : 2001 TaxPub(DT) 1245 (Bom-HC) N.N. Desai Charitable Trust v. CIT (2000) 246 ITR 452 (Guj) : 2000 TaxPub(DT) 0642 (Guj-HC) Shantagauri Ramniklal Trust & Others v. CIT And Another (1999) 239 ITR 528 (Guj) : 1999 TaxPub(DT) 0963 (Guj-HC) New Life In Chirst Evangelistic Association v. CIT & Another (2001) 246 ITR 532 (Mad) : 2001 TaxPub(DT) 0092 (Mad-HC) Fifth Generation Education Society v. CIT (1990) 185 ITR 634 (All) : 1990 TaxPub(DT) 1173 (All-HC).

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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