Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (9) TMI 772 - AT - Income TaxRejection of Registration u/s. 12AA - trust has not commenced its activities - whether CIT (E) has erred in not granting sufficient and reasonable opportunity to the appellant and grievously erred in rejecting application under section 12AA ? - HELD THAT:- CIT(E) has denied the registration under section 12AA before the Trust starts realizing its objects. It is undisputed fact that the assessee-trust filed an application for registration u/s. 12AA - Trust was constituted by indenture of Trust Deed and it was registered with the Charity Commissioner, Ahmedabad. It is also an undisputed fact that the Trust has at the commencement stage and no activities were carried on, however, the object of the Trust were clearly established. Thus, it is premature to decide or conclude the activities of the Trust. As such, it is settled law that the denial of registration u/s 12AA is not proper when the trust is yet to start its charitable activities. The Pr. CIT (E) cannot examine the objects of the trust, which is at premature stage. Registration of the trust does not involve enquiry into the actual activities or application of funds, etc. Therefore, at this stage, the only enquiry required to be conducted was with respect to the object of the trust alone. The details called for by the Pr.CIT (E) pertained to matters that may be examined at the stage of assessment. At that stage, if the assessee were to be found to have actually engaged in any noncharitable activity, the benefit of exemption may be denied at that stage in the manner provided by the Act. In the light of above, we are of the opinion that the matter of registration under section 12AA should be set-aside to file of the Pr. CIT(E) for examination the basic facts and pass fresh order - Pr. CIT (E) would give a proper opportunity of being heard and allow the assessee to furnish any material in support of its claim. Assessee's appeal allowed for statistical purposes.
|