Registration U/s. 12AA cannot be denied for registration of society twice with Registrar of Societies

CIT (Exemptions) Vs Shri Mahavir Jain Society (Punjab and Haryana High Court)

In the present case, the assessee had filed an application on 26-2-2013 for grant of registration under section 12AA of the Act before the Commissioner. Vide order dated 27-8-2013 (annexure A-l), the Commissioner refused to grant registration to the assessee-society, inter alia, on the ground of non-production of documen­tary evidence in respect of aims and objects of the society, absence of audited financial statements and non-explanation regarding registration of the society twice with the Registrar of Firms and Societies, Chandigarh. Aggrieved by the order, the assessee filed an appeal before the Tribunal. The matter was considered in detail by the Tribunal. It has been catego­rically recorded by the Tribunal that one of the objects of the society as mentioned in its bye-laws was to provide free medical aid by opening hos­pitals, diagnostic centres, maternity home and by organizing special medical camps. These activities had also been demonstrated in the previ­ous three years by the respondent-assessee in its balance-sheet, income and expenditure account, receipts and payment account which were pro­duced before the Commissioner. Further, the Commissioner had not commented adversely on the documents placed before it.

With regard to the reason that the assessee had not furnished audited financial statements, it has been recorded by the Tribunal that the same were not relevant for establishing the fact whether the activities of the trust were genuine or not.

Even the provisions of the Act do not require audited financial statements to be furnished while seeking registration under section 12AA of the Act. Rule 17A of the Income Tax Rules, 1962, provides the documents which should accompany the application under section 12A of the Act for registration of charitable or religious trust or institution.

As regards the plea that the assessee had offered no explana­tion about the registration of the society twice, it was recorded by the Tri­bunal that registration of a society was not a precondition for granting registration under section 12AA of the Act. Thus, it was rightly concluded by the Tribunal that the Commissioner was not justified in rejecting the application for registration of the assessee-society by insisting on the conditions not contemplated by the statute.