Case Law Details
Teachers Academy Education Trust Vs CIT (ITAT Bangalore)
The application in the present case has been made by the assessee for grant of registration u/s. 12A of the Act. The facts that need to be considered for grant of registration u/s. 12A of the Act has been laid down in section 12AA of the Act. A reading of the provisions of section 12AA(1) of the Act shows that before the grant of registration, the CIT(E) has to satisfy himself about the genuineness of the activities of the trust and also about the objects of the trust, whether it is charitable in nature or not. In the present case, there can be no dispute regarding the charitable nature of the objects of trust which is providing for education.
As far as genuineness of the activities of the assessee is concerned, the only objection of the CIT(E) is contained in para 8 of his order in which there is a reference to the orders of assessment for AYs 2016-17 and 2017-18. The addition made u/s. 69 of the Act is already subject matter of challenge in the proceedings before the first appellate authority. It is not the case of the assessee that the addition u/s. 69 of the Act has anything to do with the activities of the trust. In these circumstances, there appears to be no basis for the CIT(E) in refusing grant of registration to the assessee.
The Hon’ble Karnataka High Court in the case of Garden City Educational Trust (supra) has taken a view that grant of registration will not by itself confer benefits of exemption u/s. 11 and 12 of the Act to a trust and that so long as the activities are charitable in nature and if there is no evidence to show that the activities of the trust are not being carried out genuinely, then the registration has to be granted.
The CIT(E) seems to have taken recourse to the provisions of section 12AA(4) of the Act which was inserted by the Finance Act of 2014 w.e.f. 01.10.2014. We find that those provisions are applicable only when the CIT(E) seeks to cancel the registration already granted to a trust. Those provisions cannot be made applicable for grant of registration u/s. 12AA of the Act. We also find that none of the findings given in the survey report can justify the refusal of grant of registration to the assessee and the reasons given by the assessee in this regard are found to be acceptable.
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