Aruva Foundation Vs CIT (ITAT Indore)
ITAT Indore held that denial of grant of registration u/s. 12AB of the Income Tax Act by CIT(E) merely because assessee had intention to carry out some commercial activity not sustainable since proviso to section 2(15) allows commerciality in activity upto specified limit.
Facts- The assessee-company incorporated u/s 8 of the Companies Act, 2013 claiming to be for charitable purpose, applied to CPC for grant of provisional registration u/s 12AB and provisional approval u/s 80G, which were granted by CPC. Subsequently, the assessee applied to CIT(E) for grant of final registration u/s 12AB and final approval u/s 80G but the Ld. CIT(E) rejected assessee’s applications for final registration u/s 12AB / final approval u/s 80G and also cancelled provisional registration u/s 12AB / provisional approval u/s 80G vide two separate orders as mentioned above. Aggrieved, the assessee has come in these appeals.
Conclusion- The provisions of law clearly show that even if any object or activity of assessee, out of various multiple objects and activities, has element of commerciality, that would result in denial of exemption u/s 11/12 to that extent and in that particular previous year only but the CIT(E) in exercise of power u/s 12AB, cannot deny registration to assessee.
