Shree Cambay Swetamber Visha Shrimali Jain Samaj Sahayak Trust Vs CIT (Exemption) (ITAT Mumbai)
No proof of overseas donations, yet overseas object clause puts 80G & 12AB in Jeopardy – Trust’s clean track record vs. Amended Law – Relief from ITAT- Allows fresh hearing
Assessee trust, established in 1962 & registered u/s 12AA & 80G, appealed against the order of CIT(Exemptions) which denied renewal of registration u/s 12AB & 80G. The denial was primarily on the ground that clause 3(c) of the trust deed permitted donations for students studying abroad, allegedly contravening Sec 11(1)(a). Assessee argued that no such donations had ever been made & a resolution dated 12.12.2024 had amended the clause to prohibit such donations. However, this was not considered as no further opportunity was granted for hearing.
Tribunal examined the amended registration provisions u/s 12AB, highlighting that under the post-01.04.2021 regime, conversion from provisional to regular registration requires satisfaction regarding genuineness of activities & compliance with all laws. Following its earlier decision in Sila for Change Foundation v. CIT(E), Tribunal held that the presence of an object clause enabling activities outside India could amount to a “specified violation” u/s 12AB(4) & (5), as inserted by the Finance Act, 2022, unless suitably amended. While earlier judicial precedents allowed exemption denial only to the extent of actual foreign application of income, the amended law now requires compliance review even at the registration stage.
