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TMI Blog2018 (4) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 bonafide registration of a society is not a pre-condition for granting registration under Section 12AA even when it had been brought on record that civil as well as criminal proceedings were going on in various courts, vis-à-vis disputes amongst the members of the society, which lead to conclusion that affairs of the society are not being run in a manner that enures to the benefit of general public?" 2. A few facts relevant for decision of the controversy involved as narrated in the appeal may be noticed. The respondent-assessee is a society. It filed an application dated 26.02.2013 for grant of registration under Section 12AA of the Act. The Commissioner of Income Tax-I, Ludhiana, [in short, 'the CIT)], vide the order dated 27.08.2013 (Annexure A-1), refused to grant registration to the Trust, inter alia, on the ground that the assessee failed to produce the documentary evidence in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) of sub-section (1) of section 12A. (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 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 the activities of the Trust were genuine or not. Even the provisions of the Act do not require audited financial statements to be furnished while seeking registration under Section 12AA of the Act. Rule 17A of the Income Tax Rules, 1962, provides the documents which should accompany the application under Section 12A of the Act for registration of charitable or religious trust or institution. As regards the plea that the assessee had offered no explanation about the registration of the Society twice, it was recorded by the Tribunal that registration of a society was not a pre-condition for granting registration under Section 12AA of the Act. Thus, it was rightly concluded by the Tribunal that the CIT was not justified in rejecting the application for registration of the assessee-Society by insisting on the conditions not contemplated by the statute. The relevant findings recorded by the Tribunal in this regard read thus:- "13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration 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 registration under section 12AA. Moreover, the Ld. AR demonstrated before us by referring to its paper book page no.61-65, that reason for non-furnishing of audited results was duly explained to the Ld. CIT. The Ld. AR stated that the assessee had appointed M/s Shammi Garg & Co. C.A., Ludhiana as its auditors for the 2009-10, and referred to Page no.61 of the Paper Book, which was the appointment letter issued by the assessee society to the CA firm. The Ld. AR, thereafter referred to paper Book No.62, which was the communication of the new auditors, with the previous auditors i.e. M/s S.S. Periwal & Co., seeking no objection to their appointment as auditors of the society. At Paper book No.63, the Ld. AR reproduced the letter sent by the previous auditors to the new auditors, objecting to their appointment. At paper book 64, was placed the letter sent by the assessee society to the previous auditors, strongly objecting to their refusal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration 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 application for registration under S.12A, only inquiry which could possibly be made would be whether the applicant-trust has made application and whether the accounts are maintained in the manner as suggested in the said section CIT was not justified in rejecting application for registration for want of amended trust-deed since it is not a prerequisite condition for registering the applicant as a trust, Tribunal was justified in setting aside the order of CIT and remitting the matter for decision afresh." We therefore hold that the CIT was not justified in rejecting the application for registration of the assessee society by insisting on conditions not contemplated by the statute." 6. Learned counsel for the appellant-Revenue has not been able to show that the view taken by the Tribunal is erroneous. He has also not been able to produce any material on record to show that the approach adopted by the Tribunal is legally unsustainable. Thus, no subst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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