Rare Cancer Care Foundation Vs ITO (ITAT Delhi)
New Charitable Institution Entitled to 12AB & 80G – Lack of Activities No Ground for Denial: ITAT Delhi
Delhi ITAT has delivered an important ruling in favour of newly incorporated charitable organisations, holding that the absence of past activities or expenditure cannot be a ground for denying registration u/s 12AB or approval u/s 80G when the objects are charitable & genuine.
Assessee, Rare Cancer Care Foundation, is a Section 8 non-profit company incorporated on 05.01.2022 with the primary objective of promoting cancer awareness & related charitable activities. It applied for registration u/s 12AB & approval u/s 80G.
CIT(E) rejected the applications solely on the ground that the assessee had not carried out any charitable activities since incorporation & no expenditure had been incurred towards its stated objects. Therefore, the genuineness of activities could not be verified. Notably, CIT(E) did not dispute the charitable nature or genuineness of the assessee’s stated objectives.
Assessee argued before the Tribunal that for newly formed institutions, the Income-tax Act does not mandate commencement of activities before seeking registration. It relied on decisions of SC in Ananda Social & Educational Trust v. CIT (426 ITR 340) holding that newly formed trusts are entitled to registration based on objects & proposed activities & CIT(E) v. International Healthcare Educational & Research Institute (SC), reiterating the same principle. Relaince was also placed on Delhi HC in Foundation of Ophthalmic & Optometry Research Education Center (355 ITR 361) holding that absence of activities not a ground for refusal if objects are charitable.
