Case Law Details
Vidyadayani Shiksha Samiti Vs. CIT (ITAT Delhi)
Commissioner as to whether while granting registration u/s 12A he is required to examine the books of account etc. or he is only to satisfy himself regarding the objects of the trust and genuineness of the activities of the trust, we find various courts have held that while granting registration u/s 12A the ld. CIT is required to see only the objects of the assessee trust/society and not to examine the application of income. He is not required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit while granting registration. He is only required to examine the objects of the trust. We find identical issue had come up before the Tribunal in the case of Bhartiya Kisan Sangh Sewa Niketan (supra). In the said case also the assessee trust did not produce the books of account, bills and vouchers etc. for verification of the ld. CIT for which the ld. CIT held that the assessee society is not carrying out any charitable activities. Due to non-compliance of assessee society, the genuineness of the activities could not be verified. The ld. CIT, therefore, relying on various decisions including the decisions which have been relied on by the ld. CIT in the present case, rejected the claim of registration u/s 12A(1) of the I.T. Act. When the matter traveled to the Tribunal, the Tribunal allowed the claim of registration by holding that at this stage on granting registration u/s 12A the ld. CIT is required to see the objects of the society and not required to examine the application of income which will have to be undertaken by the Assessing Officer on a year to year basis after the assessee files the return of income claiming exemption u/s 11 of the I.T. Act. CIT was not justified in rejecting the claim of registration u/s 12A.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal filed by the assessee is directed against the order dated 21.08.2015 passed by CIT (Exemptions), Lucknow [in short (the CIT)] u/s 12AA(1)(b)(ii) denying the registration sought by the assessee u/s 12A(1) of the I.T. Act.
2. Facts of the case, in brief, are that the assessee society filed an application for registration u/s 12A(1) on 30.03.2015 before the ld. CIT. Since there was no compliance by the assessee as observed by the ld. CIT in his order, he proceeded to decide the issue on the basis of material available on record. From the details furnished by the assessee along with the application in Form No. 10A he observed that the assessee society has not carried on any charitable activities. Due to non-production of books and vouchers by the assessee, the genuineness of activities could not be verified. According to him, as per the provisions of section 12AA(1)(b), two factors namely the object of charitable purpose and genuineness of activities have to be proved before granting the registration. Since the assessee failed to prove the same, he held that the assessee society has not made out the case for granting the registration u/s 12AA(1)(b) of the I.T. Act. He referred to the decision of the Honorable Delhi High Court in the case of Kirti Chandra Tarawati Charitable Society vs. DIT (Exemption) reported in 232 ITR 11 wherein it has been held that there is no obligation on the CIT to grant registration to a society merely by looking at the instrument creating the society and shutting his eyes to the actual activities carried out by it. He also referred to the decision of the Honorable Kerala High Court in the case of Self Employers Service Society vs. CIT reported in 247 ITR 18 wherein it has been held that if a society proposed to carry out charitable activities in future, registration even u/s 12AA would not be available to it. He also referred to the decision of the Honorable Uttarakhand High Court in the case of CIT vs. National Institute of Aeronautical Engineering Education Society reported in (2009) 181 taxmann.com 205 and the decision of the Lucknow Bench of the Tribunal vide ITA No. 809/LKW/2014 order dated 26.02.2015 and various other decisions and held that assessee’s claim in absence of sufficient material required for formation of the satisfaction cannot be accepted. He accordingly rejected the claim of assessee for grant of registration u/s 12A of the I.T. Act.
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