Vijayanagar Educational Trust Vs CIT (Exemptions) (ITAT Bangalore)
ITAT Bangalore held that mere delay in filing the return of income cannot be construed as a violation so grave as to justify cancellation of registration under Section 12AA(4). Delay in return was unintentional hence cancellation of registration u/s. 12AA not justified.
Facts- The present appeal is preferred by Vijayanagar Educational Trust (the ‘assessee’, ‘appellant’, ‘Trust’) for the assessment year 2019-20 against the order passed by the ld. Commissioner of Income Tax (Exemptions), Bengaluru dated 13.08.2019 cancelling the registration granted to the trust w.e.f. AY 2015-16 and directing the AO to invoke the provisions of section 115TD of the Income Tax Act, 1961.
Conclusion- Held that the funds were introduced into the Trust, were reflected in its books where the said loa115TDn reflected as a liability and were applied solely for charitable and Trust-related activities. In fact, the existence of a financial crisis is also acknowledged by the CIT(E) in para 12.2 of the impugned order while dealing with another issue. Thus, the very basis of the CIT(E)’s conclusion is not only unsupported by evidence but also contrary to the record. Thus, the allegation of violation under Section 13(1)(d) is misconceived. Thus, this transaction could not have been considered as a violation warranting cancellation or adverse inference under Section 12AA (4) of the Act.
