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2018 (3) TMI 1181 - AT - Income TaxRejection of application for registration u/s 12AA (1)(b)(ii) - test of the genuineness of the activity at initial stage when the trust has not yet commenced the charitable activity - Held that:- The assessee society objected to the ld CIT(E) observation as regards his non-satisfaction about ‘genuineness of activities as no activities were started by the assessee trust since, it was incepted on 01/07/2016 and being the first year of the trust no activities could be conducted during the year. On fact, in the absence of activities, any enquiry of the nature would amount putting the cart before the horse. At this stage, only the genuineness of the objects has to be tested and not the activities, which have not commenced. We find that on the facts, the findings of the Ld. CIT(E) regarding the ‘genuineness of activities’ is in direct conflict with the law laid down by Hon’ble jurisdictional High Court in the case of ‘CIT(E) vs. SheedharSewa Trust Asharfi Bhawan, [2017 (10) TMI 386 - ALLAHABAD HIGH COURT]. Thus, at the initial stage when the trust has not yet commenced, the test of the genuineness of the activity cannot be the ground for the rejection of the registration of the assessee trust. In view above, we accept the grievance of the assessee is justified. Therefore, reverse the findings recorded by the CIT(E) and direct to issue Certificate granting registration under section 12AA in the name of the applicant society, forthwith from the financial year in which application was filed. - Decided in favour of assessee.
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