Machhi Mahajan Sports and Cultural Association Vs CIT (Exemption) (ITAT Surat)
Conclusion: Tribunal ordered fresh consideration of an application for registration under Section 12AB as Commissioner of Income Tax(Exemption)[CIT(E)] rejected the application of registration on grounds of limited review of the trust’s objectives and had not given his finding on the objects and activities of assessee.
Held: Assessee, filed an application for registration under Section 12AB. CIT(E) issued notices seeking explanations and audited accounts for FY 2022–23. CIT(E) in the show-cause notice observed that the trust’s objectives were charitable but restricted to its members and not for the public at large. Based on this, CIT(E) held that the objectives did not meet the definition of “charitable purposes” under Section 2(15). CIT(E) also noted that no response was filed to the notice and, referring to a Punjab & Haryana High Court decision, denied the registration under Section 12AB and cancelled the provisional registration under Section 12A(1)(ac)(iii). Aggrieved by this order, assessee filed an appeal before Tribunal. It was held that CIT(E) had not examined the objects and activities of assessee trust which were the twin conditions for granting registration under Section 12A/12AB. CIT(E) while rejecting the application of assessee had referred Clause-H to O only and had not considered the other clauses. Entire memorandum of association had to be considered and not by selecting a particular clause of the memorandum of association. Considering the fact that CIT(E) had not given his finding on the objects and activities of assessee, therefore, in view of the above factual and legal position, it was deemed appropriate to restore the issue back to the file of CIT(E) reconsider the registration of assessee under Section 12AB afresh and pass order in accordance with law. CIT(E) should consider the aforesaid decisions, cited by assessee, at the time of fresh adjudication of the application of assessee under Section 12A/12AB.
