Ruth Foundation Charitable Trust Vs CIT (Exemptions) (ITAT Bangalore)
Genuineness of activities, Not quantum of expenditure, Determines Eligibility for 12AB & 80G Registration: ITAT Bangalore
Bangalore ITAT has allowed the appeal filed by Ruth Foundation Charitable Trust against the order of the CIT (E) who had cancelled registration u/s 12AB & approval u/s 80G. Tribunal observed that at the inception stage of a trust, the extent of expenditure incurred is not decisive & what is material is the genuineness of the activities carried out in line with the objects of the trust.
Assessee trust was constituted by deed dated 11.01.2021, later amended on 30.11.2022 & was granted provisional registration on 31.05.2021 u/s 12A & provisional approval u/s 80G valid till AY 2024-25. On 07.06.2024, it applied for final registration in Form 10AB. CIT (E), however, cancelled both approvals observing that no substantial activities had commenced & only nominal expenses such as rent & administrative charges were shown, apart from a sum of Rs.30,000 incurred towards a blanket distribution program. On that basis, the application was held premature & rejected.
Before Tribunal, Assessee argued that all required documents had been furnished & that CIT(E) had herself acknowledged receipt of the same. It was further submitted that photographs & details of the blanket distribution program conducted on 30.12.2024 along with a healthcare initiative titled “Pratham Upchaar” were produced to establish commencement of activities. It was contended that law mandates examination of the genuineness of activities & not the quantum of expenditure at the inception stage & that meagre activity cannot be a ground for refusal of registration.
