Shree Vishnu Bhagwan Mandir Trust Vs ITO (ITAT Delhi)
Delhi ITAT: CIT(E) Cannot Reject U/s 12AB Registration Merely by Questioning Source of Donations or Cash Deposits – Scope Limited to Objects & Genuineness of Activities
The Delhi Bench of the Income Tax Appellate Tribunal restored the registration application of Shree Vishnu Bhagwan Mandir Trust and held that while examining an application under Section 12AB, the CIT(E) must confine himself to examining the charitable/religious objects and genuineness of activities of the trust, and cannot reject registration merely by questioning the source of donations or cash deposits.
The trust, running a historical temple at Hansi, Haryana, had applied for registration in Form 10AB. The CIT(E) rejected the application on the ground that the assessee had failed to furnish complete information regarding financial transactions and source of cash deposits, and therefore the genuineness of activities could not be verified.
Before the Tribunal, the assessee contended that only limited notices were issued and that the CIT(E) exceeded the permissible scope of enquiry under Section 12AB by examining the identity and source of donations – matters which properly fall within assessment proceedings. The Tribunal accepted the contention and observed that under Section 12AB(1)(b), the relevant enquiry at the registration stage is confined to verifying the objects of the trust, genuineness of activities, and compliance with other applicable laws.
The ITAT specifically noted that the activity reports and trust deed placed on record sufficiently demonstrated the charitable nature and objects of the trust. It further held that the genuineness of donations or possible violation of Section 115BBC could be examined during assessment proceedings and are not independent grounds for rejection of registration under Section 12AB.
Considering that the application had been rejected largely for alleged non-compliance, the Tribunal restored the matter to the file of the CIT(E) with a direction to grant one final opportunity to the assessee and decide the application afresh in accordance with law.
FULL TEXT OF THE ORDER OF ITAT DELHI
