Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 951 - AT - Income TaxRegistration under section 12A denied - Director of Income-tax (Exemption) opined that in absence of necessary information with regard to carrying on of activities by the trust, the genuineness of the activities cannot be ascertained, hence, the trust cannot be granted registration under section 12A - Held that:- Commencing of activities is not the sole criterian to ascertain genuineness of the activities. As can be seen, the trust was created in March, 2013 and it applied for registration in June '13. Therefore, within a span of three/four months, it cannot be expected that the trust will be undertaking activities on a large scale. Moreover, it appears from the materials on record that the trust in fact has undertaken certain activities though on a limited scale, to generate/create awareness amongst the general public with regard to fraud committed in the health sector. In this view of the matter, it cannot be said that the trust has not commenced its activities. Further, it has to be noted that trust or institution is not prohibited from carrying on of any activity of commercial nature if such commercial activity is intended for achieving the objects of the trust. So far as Director of Income-tax (Exemption)'s observation with regard to violation of provision contained under section 11(1)(d) of the Act is concerned, on going through the said provision, we are of the view that the observation made by the Director of Income-tax (Exemption) is not only irrelevant but is also misplaced. Furthermore, if there is any violation of the provision contained under section 11, the same can be looked into by the Assessing Officer while examining the assessee's claim under section 11 of the Act in the course of assessment proceeding. At the time of grant of registration under section 12A of the Act, the Director of Income-tax (Exemption) cannot step into the shoes of the Assessing Officer and examine the claim of the assessee under section 11. In view of the aforesaid, we hold that the Director of Income-tax (Exemption) was not justified in rejecting the assessee's application for grant of registration under section 12A. Accordingly, we set aside the impugned order of the Director of Income-tax (Exemption) and direct him to grant registration to the assessee under section 12A. Further, we direct the Director of Income-tax (Exemption) to grant approval under section 80G(5) of the Act subject to fulfilment of conditions prescribed under clauses (i) to (v) of section 80G(5) of the Act. - Decided in favour of assesse.
|