Case Law Details
Abhyudaya Sewa Foundation Vs CIT (ITAT Bangalore)
Check Objects, Verify Genuineness – Leave the rest to AO – CIT(E) must see What you Aim & What you Do – Not How Much You Spend; CIT(E) cannot Step into AO’s Shoes- Meagre Spending Not a Ground to Deny 12AA & 80G – Section 8 Company Secures Approval: ITAT Bangalore:
Assessee, incorporated on 26.11.2023 as a Sec 8 company, was established with objects directed towards relief to the poor, promotion of education, skill development, & environmental sustainability. It had obtained provisional registration in Form 10AC on 31.03.2024. Subsequently, on 30.09.2024, it applied for permanent registration u/s 12AA & recognition u/s 80G.
Tribunal observed that CIT(E) has not at all disputed the factum that the objects of Assessee, which is a section 8 company are charitable in nature. CIT(E) has merely rejected the application on the ground that Assessee has spent a meagre amount towards the charitable activities. Tribunal ruled that at the time of grant of registration u/s. 12AA & 80G two things are to be examined by the CIT(E) i.e.
a) Whether activities of the assessee are genuine
b) Whether the objects of the trust are charitable in nature.
It is settled position of law that at the time of grant of registration the CIT(E) cannot step into the shoes of assessing officer & examine the benefits of sec 11 & 13, which are to be scrutinized by the assessing officer at later stage.
Tribunal ruled that Assessee is entitled for 12AA & 80G registration.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
Both these appeals of assessee are arising from separate orders of Ld.CIT(E), Bengaluru dated 24/03/2025.
2. The appeal in ITA No. 1289/Bang/2025 is related to denial of 12AA registration and the appeal in ITA No. 1280/Bang/2025 is related to the denial of the 80G registration.
3. The brief facts of the case as coming out from the authorities below are that appellant is a section 8 company and incorporated on 26/11/2023. The appellant is a non-profit organisation. The main objects of the appellant are that to provide relief to the poor, education and skill development and environmental sustainability. The appellant got temporary/provisional registration in form 10AC on 31/03/2024. Thereafter the appellant vide application dated 30/09/2024 applied for permanent registration u/s. 12AA and 80G.
4. The application, for permanent registration, filed by the assessee has been dismissed by the Ld.CIT(E) solely on the ground that the appellant has spent a meagre amount in furtherance of charitable activities.
5. Aggrieved with the order of the Ld.CIT(E), the assessee has come up in appeal before us.
6. Since the facts and circumstances of both the appeals are same and related to the same assessee, we are deciding these appeals by way of this consolidated order.
7. The Ld. Counsel for the assessee reiterated the arguments made before the lower authorities and contended that it is settled position of law that Ld.CIT(E) cannot step into the shoes of assessing officer. It is next contended that at this stage of 12AA registration, the Ld.CIT(E) is required to see only the objects of the trust, whether they are charitable or not and the activities of the trust of the assessee, whether they are genuine or not.
8. The Ld. DR relied upon the order of the Ld.CIT(E).
9. After considering the rival submissions, we hereby observe that the Ld.CIT(E) has not at all disputed the factum that the objects of the assessee, which is a section 8 company are charitable in nature. The Ld.CIT(E) has merely rejected the application on the ground that the assessee has spent a meagre amount towards the charitable activities. In our view, the at the time of grant of registration u/s. 12AA and 80G two things are to be examined by the CIT(E) i.e.
a) Whether activities of the assessee are genuine
b) Whether the objects of the trust are charitable in nature.
10. It is settled position of law that at the time of grant of registration the CIT(E) cannot step into the shoes of assessing officer and examine the benefits of section 11 and 13, which are to be scrutinized by the assessing officer at later stage. In view of the above facts and circumstances of the case, we are of the firm opinion that the assessee is entitled for 12AA registration as well as the 80G registration. Hence both the appeals of the assessee stands allowed.
In the result, both the appeals filed by the assessee are allowed.
Order pronounced in the open court on 20th August, 2025
Author Bio
