Shraddha Eyecare Trust Vs CIT (ITAT Bangalore)
Bengaluru ITAT: Absence of Fire and Structural Safety Certificates Justified Rejection of Section 12AB Registration; Matter Remanded After Subsequent Compliance
The Bengaluru Bench of the ITAT held that where compliance with other laws is material to achieving the objects of a trust, the Commissioner (Exemptions) is justified in examining such compliance while considering registration under section 12AB. In the case of a trust running a hospital, the Tribunal observed that fire safety, structural stability, building safety and other statutory approvals are fundamental requirements directly linked to the lawful and safe conduct of its charitable activities, and their absence before the CIT(E) justified rejection of the registration application.
However, before the Tribunal, the assessee produced subsequently obtained fire safety and structural stability certificates issued by the competent authorities. Considering these fresh documents, the Tribunal held that they were material for determining compliance with section 12AB(1)(b)(i)(B) and therefore deserved examination by the CIT(E). Accordingly, the Tribunal restored the application for registration under section 12AB to the file of the CIT(E) for fresh consideration after verifying the newly produced certificates and other statutory compliances.
The Tribunal further held that recognition under section 80G is consequential upon registration under section 12AB. Since the application for registration had been restored, the rejection of section 80G approval was also set aside and remanded to the CIT(E) for fresh adjudication in accordance with the outcome of the section 12AB proceedings. Both appeals were allowed for statistical purposes.
