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2021 (8) TMI 1088 - AT - Income TaxExemption u/s 11 - denial of registration under section 12AA(1)(b)(ii) to ITAT Bar Association - CIT’s jurisdiction to denied deduction - HELD THAT:- So far as grant of registration u/s 12AA of the Act is concerned, the Ld. CIT’s jurisdiction is only to verify the objects of the institution and genuineness of the activities, meaning thereby that he has to satisfy himself that objects are charitable in nature and activities being carried on or to be carried on are genuine, meaning thereby that they are in consonance for achieving of charitable objects and nothing else. From a reading of section 12A and 12AA of the Act what is intended thereby is only a registration simplicitor of the entity/trust. The registration u/s 12AA of the trust has been made a condition precedent for claiming the benefits of the exemption u/s 11 and 12 of the Act. While processing the application for registration u/s 12AA of the Act, no examination of the modus of the application of the funds of the assessee is called for. The stage for consideration of the application of the funds vis-a-vis objectives of the trust arises at the time of assessment by the A.O. where benefits are claimed by the assessee in terms of section 11 and 12 of the Act and AO can examine the question as to the nature of the contributions etc. at the time of assessment. At the time of registration of the assessee u/s 12AA is concerned what is to be looked into is whether the assessee trust is a genuine one or whether it is a sham institution floated only to avail the benefits of exemption under the Act. CIT(E) could have examined only the genuineness of the association and its activities postulated, are to achieve the objects for which it is created. There was no material to show that assessee (ITAT Bar Association) was not genuine or that its activities were not as professed in the MOA and AOA. There was no finding that assessee (ITAT Bar Association) was a sham entity and therefore, we are inclined to set aside the order of the Ld. CIT(E) with the direction to him to consider the application for registration u/s 12AA of the Act, de novo, by passing a speaking order in accordance to law and after giving adequate opportunity to the assessee in accordance to law. Appeal of the assessee is allowed for Statistical purposes.
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