Imame Rabbani Foundation Vs ITO (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, directed the Commissioner of Income-tax (Exemptions) (CIT(E)) to grant regular registration under Section 12AB of the Income-tax Act, 1961, to the Imame Rabbani Foundation. The Tribunal rejected the CIT(E)’s finding that the trust had already commenced charitable activities, ruling that the mere purchase of land or acquisition of infrastructure does not constitute commencement for the purpose of denying registration.
The assessee-trust had initially been granted provisional registration by the Central Processing Centre (CPC) and subsequently filed an application in Form 10AB seeking regular registration under Section 12AB. The CIT(E), however, rejected this application and effectively cancelled the provisional registration. The sole basis for the rejection was the finding that the trust had “already commenced” its activities as of December 26, 2022, by purchasing land. The CIT(E) reasoned that provisional registration is intended only for institutions that have not yet commenced activities, rendering the assessee’s application under the corresponding provision non-maintainable.
Before the ITAT, the assessee contended that the CIT(E)’s approach was hyper-technical and contrary to the principles governing charitable registration. The appellant’s representative argued that preparatory acts, such as buying land or receiving seed donations, are distinct from the actual commencement of charitable activities, which only begins when benefits are delivered to the intended beneficiaries in line with the trust’s objects.
