CIT Vs Shyam Mandir Committee Khatushyam Ji (Rajasthan High Court)
Rajasthan High Court has dismissed a series of appeals filed by the Commissioner of Income Tax (CIT) against Shyam Mandir Committee, Khatushyam Ji. The High Court’s decision affirms the Income Tax Appellate Tribunal’s (ITAT) ruling to grant registration to the trust under Section 12A of the Income Tax Act, 1961. This judgment underscores a crucial legal principle: at the initial stage of granting registration to a trust, the primary focus of tax authorities should be on the genuineness of its activities and objects, rather than prematurely scrutinizing the application of its income or potential violations of Section 13 of the Act.
The legal dispute originated from an order issued by the Commissioner of Income Tax, Jaipur-III, Jaipur, on September 30, 2009. This order had rejected the application for registration made by the Shyam Mandir Committee under Section 12A of the Income Tax Act. Aggrieved by this rejection, the trust appealed to the ITAT, which subsequently reversed the CIT’s decision and allowed the assessee’s appeals, directing the grant of registration. Dissatisfied with the ITAT’s verdict, the Revenue proceeded to file appeals before the Rajasthan High Court, raising several substantial questions of law for judicial determination.
