Zindagi Society Vs CIT(E) (ITAT Delhi)
Summary: ITAT Delhi restored Zindagi Society’s application for registration under Section 80G to the CIT(E) for a fresh decision, relying on the principle that registration under Section 12A is sufficient evidence of an institution being established for charitable purposes and, therefore, Section 80G registration cannot be denied on that basis. The Society had filed Form 10AB on 23.02.2024 seeking registration under Section 80G(5)(iii). The CIT(E), after issuing a questionnaire and another opportunity to furnish details, rejected the application on 07.08.2024 and cancelled the provisional registration granted on 05.04.2022.
Before the Tribunal, the assessee submitted that it was registered under Section 12AA, was established to promote educational activities and had entered into an MoU dated 01.02.2023 with the Government of Uttar Pradesh for setting up a world-class university involving an investment of Rs.350 crore. It relied upon Bharat Vikas Parishad Maharana Pratap Nyas Vs CIT(E), which had followed the Punjab & Haryana High Court judgment in Sonepat Hindu Educational and Charitable Society Vs CIT. The Revenue contended that the assessee had failed to file the relevant documents.
The Tribunal noted that the Society had registration dated 05.04.2022 for A.Ys. 2022-23 to 2026-27 under Section 12AA and applied the ratio of Sonepat Hindu Educational and Charitable Society that Section 12A registration is sufficient for charitable purposes and Section 80G registration cannot consequently be denied. In the interest of justice, the matter was restored to the CIT(E) for a fresh decision in accordance with law, and the appeal was allowed for statistical purposes.
Cases Discussed
| Case | Treatment / Principle |
|---|---|
| Bharat Vikas Parishad Maharana Pratap Nyas Vs CIT(E), ITA No. 6487/Del/2018, order dated 06.02.2019 | Relied upon by assessee. The Coordinate Bench had allowed the matter in favour of the applicant by following the jurisdictional High Court decision in Sonepat Hindu Educational and Charitable Society Vs CIT. |
| Sonepat Hindu Educational and Charitable Society Vs CIT, (2005) 278 ITR 262 (P&H) | Followed / ratio applied. Registration of an institution under Section 12A is sufficient for its being established for charitable purposes; consequently, registration under Section 80G cannot be denied. Applying this principle, the Tribunal restored the matter to the CIT(E) for fresh decision. |
FULL TEXT OF THE ITAT DELHI ORDER
1. The appeal filed by assessee is against the order dated 07.08.2024 of Learned Commissioner of Income Tax (Exemption)-Delhi [hereinafter referred to as ‘Ld. CIT(E)’] rejecting application in Form 10AB for grant of registration under section 80G(5)(iii) of the Act and cancellation of provisional registration granted vide order dated 05.04.2022 having Unique Registration No. AAAAZ1691BF20221.
2. Brief facts of the case are that applicant-assessee filed application dated 23.02.2024 in Form 10AB for registration under section 80G(5)(iii) of the Act. The applicant was issued a questionnaire dated 14.03.2024 with a request to furnish certain details/documents/clarifications in support of its claim of registration under section 80G(5)(iii) of the Act. The assessee filed part reply in response to the notice. The applicant was afforded another opportunity vide letter dated 09.05.2024. The learned CIT(E) vide order dated 07.08.2024 rejected the application and cancelled provisional registration.
3. Being aggrieved, applicant preferred present appeal.
4. Learned Authorized Representative for applicant submitted that application is duly registered under section 12AA of the Act. The applicant-society is established for promoting educational activities and all the trustees being associated with charitable activities. Based on registration under section 12AA of the Act, the grant of registration under section 80G is of consequential nature in the absence of any dispute about objects and activities of the society. The applicant had also entered into memorandum of understanding dated 01.02.2023 with the Government of Uttar Pradesh regarding setting up a world class university by investing Rs.350 cr. The Learned CIT(E) ought to have granted approval under section 80G of the Act since assessee was granted exemption under section 12AA of the Act vide order dated 05.04.2022 from A.Ys. 2022-23 to 2026-27.
4.1 The applicant relied upon the decision of the Co-ordinate Bench of Tribunal in the case of Bharat Vikas Parishad Maharana Pratap Nyas vs. CIT(E) ITA No.6487/Del/2018 order dated 06.02.2019 which was allowed in favour of the applicant by following the decision of Hon’ble Jurisdictional Punjab and Haryana High Court in the case of Sonepat Hindu Educational and Charitable Society vs. CIT (2005) 278 ITR 262 (P&H) in which it was held that registration of an institution under section 12A of the Act is sufficient to of its being established for charitable purposes. Thus, registration under section 80G of the Act cannot be denied.
5. Learned Departmental Representative for the Department of Revenue submitted that applicant had failed to file relevant documents in this regard.
6. From examination of record in light of aforesaid rival contentions, it is crystal clear that learned CIT(E) while rejecting the application in order dated 07.08.2024 observed that the applicant had submitted that it is in search of piece of land for educational institution and will finalize the land in coming 6 to 8 months and start constructions. The applicant claims to have entered into memorandum of understanding dated 01.02.2023 with the Government of Uttar Pradesh regarding setting up a world class university in Gautam Buddha Nagar by making investment of Rs.350 crore. Applicant-society has registration dated 05.04.2022 from A.Y. 2022-23 to 2026-27 under section 12AA of the Act.
6.1 As per ratio of judgment of Hon’ble Jurisdictional Punjab and Haryana High Court in the case of Sonepat Hindu Educational and Charitable Society vs. CIT (supra), it is well settled that registration of institution under section 12A of the Act is sufficient for charitable purposes. Thus, registration under section 80G cannot be denied. In view of the above material facts and well settled principle of law, in interest of justice, it is considered expedient to restore the matter to the file of the learned CIT(E) for fresh decision in accordance with law.
7. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order was pronounced in the open court on 19th December, 2024
