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2022 (1) TMI 579 - AT - Income TaxExemption u/s 11 - rejection of application seeking registration u/s 12AA as well as u/s 80G - appellant is a company incorporated under the provisions of section 25 of the Companies Act, 1956 - main object of the appellant company is to promote commerce, art, culture, social development, social upliftment by way of bringing the tourism industry and craft based retailers together by organizing various type of festivals, workshops, events, dustkar programmes, design mart shows for rural craftspeople and to facilitate improved access to the folk arts and music of the region - what would be the situation where the trust/society is in existence for quite some time prior to seeking registration and is not a newly registered trust/society and at the same time, has claimed to have not undertaken any activities in pursuance of its objects in the past? - HELD THAT:- We are of the view that ratio decidendi of the aforesaid decision of the M/S. ANANDA SOCIAL AND EDUCATIONAL TRUST VERSUS THE COMMISSIONER OF INCOME TAX & ANOTHER [2020 (2) TMI 1293 - SUPREME COURT] can be applied equally in the instant case where though the assessee company has been in existence for quite some time and is clearly not a newly registered company but at the same time, since no activities are carried on by it since its inception as so claimed by it, it can still apply for registration. However, in this case, where the assessee company is in existence for more than a decade, the ld CIT(E) is well within his jurisdiction to examine such claim of no-activity by the assessee company and where it is found that some activities were actually been carried on by the assessee company, he is bound to record his satisfaction as to whether the activities so carried on are genuine and in accordance with its stated objectives or not. Secondly, the ld CIT(E) is well within his jurisdiction u/s 12AA(1)(a)(ii) to examine whether the assessee company is compliant under the extant laws as applicable and whether there are any changes in the memorandum and articles of association, the objects clause and constitution etc. since its incorporation and at the time of seeking registration. And thirdly, what are the proposed activities of the assessee company and whether they are genuine in the sense that they are in line with the objects of the assessee company or not again needs to be examined and a finding has to be recorded by the ld CIT(E) before he actually accepts or reject the application seeking registration u/s 12AA of the Act. We therefore set-aside the matter to the file of the CIT(E) to examine the matter afresh in light of aforesaid discussions after providing reasonable opportunity to the assessee company. Application seeking registration u/s 80G on account of the fact that it has been denied registration u/s 12AA of the Act. Since we have set-aside the matter pertaining to registration u/s 12AA to the file of the ld CIT(E), this matter is also set-aside to the file of the ld CIT(E) to be decided afresh after providing reasonable opportunity to the assessee company. Appeals of the assessee are allowed for statistical purposes.
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