Shri Gurushanthi Dhama Charitable Trust Vs CIT (Exemptions) (ITAT Bangalore)
CIT(E) Cannot Act Merely on AO’s Recommendation – Independent Satisfaction Mandatory for Grant or Rejection of U/s 12AB Registration
The Bangalore ITAT held that the CIT(Exemptions) cannot reject registration under Section 12AB merely because the Jurisdictional Assessing Officer (JAO) or Range Head has not recommended the case. The Tribunal emphasized that the statute requires the CIT(E) to independently examine the objects of the trust, genuineness of activities, and compliance with applicable laws before arriving at his own satisfaction.
In the present case, Shri Gurushanthi Dhama Charitable Trust, which had already obtained provisional registration under Section 12AB and provisional approval under Section 80G, applied for final registration and approval. The CIT(E) rejected the 12AB application primarily on the ground that the JAO and Range Head had not recommended registration.
Before the Tribunal, the assessee contended that it had furnished the information sought by the ITO (Exemptions) and had expressed willingness to provide any further details. However, no further opportunity was granted and the registration was rejected solely based on the adverse recommendation of subordinate authorities.
The ITAT observed that Section 12AB specifically requires the CIT(E) himself to call for information, conduct enquiries, and record satisfaction regarding the objects and genuineness of activities of the trust. The recommendation of the JAO may be an input, but it cannot substitute the statutory satisfaction that must be independently recorded by the CIT(E). The Tribunal found that the impugned order contained no independent satisfaction and was therefore contrary to the legislative scheme.
The Tribunal also noted that the assessee was not granted a final effective opportunity before rejection. Accordingly, the ITAT set aside the rejection of registration under Section 12AB and remanded the matter to the CIT(E) for fresh adjudication. Since the rejection of 80G approval was also intertwined with the registration issue and the assessee had not properly responded during those proceedings, the Tribunal restored the 80G matter as well for fresh consideration after granting adequate opportunity.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
