TMI Blog2018 (4) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ttal and Mr. Amit Rawal, JJ. Mr. Denesh Goyal, Sr. Standing Counsel for the appellant-Revenue. Mr. S.K. Mukhi, Advocate for the respondent-assessee. JUDGMENT AJAY KUMAR MITTAL, J. 1. The appellant-Revenue has filed the instant appeal under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 30.09.2015 (Annexure A-2) passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh (in short, 'the Tribunal') in ITA No.910/CHD/2013, claiming the following substantial questions of law:- (i) Whether the order passed by the ITAT in contrary to the facts and law, hence the ITAT order is perverse? (ii) Whether on the facts and circumstances of the case and in law the Hon'ble ITAT was justified in holding that the assessee was entitled to registration u/s 12A on the ground that CIT has not commented adversely on the objects of the assessee society whereas documentary evidence asked for, that would have enabled examination of genuineness of activities, were not furnished by the assessee? (iii) Whether on the facts and circumstances of the case and in law the Hon'ble ITAT was justified in holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1 st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day. (2) Every order granting or refusing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT refused to grant registration to the assessee-Society, inter alia, on the ground of non-production of documentary evidence in respect of aims and objects of the society, absence of audited financial statements and non-explanation regarding registration of the society twice with the Registrar of Firms and Societies, Chandigarh. Aggrieved by the order, the assessee filed an appeal before the Tribunal. The matter was considered in detail by the Tribunal. It has been categorically recorded by the Tribunal that one of the objects of the Society as mentioned in its bye-laws was to provide free medical aid by opening hospitals, diagnostic centers, maternity home and by organizing special medical camps. These activities had also been demonstrated in the previous three years by the respondent-assessee in its Balance Sheet, Income Expenditure account, Receipt payment Account which were produced before the CIT. Further, the CIT had not commented adversely on the documents placed before it. With regard to the reason that the assessee had not furnished audited financial statements, it has been recorded by the Tribunal that the same were not relevant for establishing the fact whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated by the fact that even the provisions of the Income Tax Act, 1961, do not require audited financial statements to be furnished, while seeking registration under Section 12AA. Rule 17A of the Income Tax Rules, 1962, list the documents which should accompany the application under section 12A for registration of charitable or religious trust or institution. At point no.(b) of the Rules it is stated that where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up have to be submitted. Clearly as per the Rules, the requirement is furnishing of only the accounts of the trust or institution seeking registration and nowhere the word audited accounts have been used. Therefore the non furnishing of audited financials cannot by itself be a criteria for holding the activities of a Trust of society as not being genuine and therefore refusing grant of registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re there. The Society in year 2009 was formed by the Ex-President and Finance Secretary but which has no relevance as on date and the Society documents i.e. Governing Body list on yearly basis is being submitted to Registrar of Firms Societies, Chandigarh for Society registered on 17/09/1974. We therefore find that the contention of the Ld. CIT that the assessee had offered no explanation about the registration of the society twice is not correct. In any case registration of a society is not a pre condition for granting registration under Section 12AA. A perusal of Rule 17A of the Income Tax Rules 1962, referred to above would show that the only requirement is to furnish the documents evidencing the creation of the trust or establishment of the institute in original, which we find, the assessee society has furnished in the form of Trust Deed. 16. In view of the facts stated above we hold that Ld. CIT was not right in refusing registration to the assessee society for non-furnishing of explanation regarding registration of the assessee society twice. In case of CIT vs. R.M.S. Trust (Madras) [2010] 326 ITR 310 it was held as under: At this stage of considering applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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