INCOME TAX ACT, 1961

Section 12

Charitable trust - Registration under section 12AA denied - Exemption under section 11 -

This appeal was filed by the assessee-trust directed against the order of CIT(E) passed under section 12AA(1)(b)(ii) denying registration under section 12AA. On perusal of the said application, CIT(E) asked to upload certain information through ITBA portal. The said information was duly filed through ITBA portal. CIT(E) had observed that assessee had not provided information as to source of addition made to the various corpus fund for the financial year 2018-19 and had not filed the evidence in support of the expenditure incurred for the financial years 2016-17 to 2018-19. CIT(E) finally concluded that since assessee-trust had failed to pay taxes on donations received forming part of corpus funds. Accordingly, he rejected the application for grant of registration under section 12AA. Held: The grant of registration and the issue of assessment or exemption under section 11 are separate and distinct. The process of registration is not on occasion for deciding the issue of exemption of donation under section 11. The issue of exemption cannot be examined during the process of registration. CIT(E) had lost slight distinction between the process of registration and exemption or assessment of income under section 11. Therefore, the reasoning of CIT(E) in denying grant of registration under section 12AA cannot be sustained in the eyes of law. In the circumstances, CIT(E) was directed to grant the registration under section 12AA.

Relied:Ananda Social & Educational Trust v. CIT & Anr. (2020) 272 Taxman 7 (SC) : 2020 TaxPub(DT) 1340 (SC), CIT (Exemptions) v. Shekhawati Public School Samiti ITA No. 173/2018 dt. 10-7-2018 : 2018 TaxPub(DT) 7538 (Raj-HC), CIT v. Vijay Vargiya Vani Charitable Trust (2014) 369 ITR 360 (Raj) : 2014 TaxPub(DT) 4152 (Raj-HC), M. Visvesvaraya Industrial Research & Development Centre v. ITAT & Ors. (2001) 251 ITR 852 (Bom) : 2001 TaxPub(DT) 1245 (Bom-HC), NN. Desai Charitable Trust v. CIT (2000) 246 ITR 452 (Guj-HC) : 2000 TaxPub(DT) 642 (Guj-HC), Shantagauri Ramniklal Trust & Ors. v. CIT & Anr. (1999) 239 ITR 528 (Guj-HC) : 1999 TaxPub(DT) 963 (Guj-HC), New Life In Chirst Evangelistic Association v. CIT & Anr. (2001) 246 ITR 532 (Mad) : 2001 TaxPub(DT) 92 (Mad-HC), Fifth Generation Education Society v. CIT (1990) 185 ITR 634 (All) : 1990 TaxPub(DT) 1173 (All-HC) and Vastushodh Foundation v. CIT ITA No.562/PUN/2016 dt. 29-1-2019.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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