Income Tax Appellate Tribunal

Pramod Kiran Sevadham Foundation vs. Commissioner Of Income-Tax

MANU/IP/0086/2021

01.06.2021

Direct Taxation

Grant of registration and assessment are two separate and distinct procedures prescribed under the Income Tax Act

The Appellant society is registered under the Bombay Public Trust Act, 1950. The Appellant society is incorporated with the objects of promotion of education, social development, women empowerment, medical help etc. An application was made for grant of registration under Section 12AA of the Income Tax Act, 1961 (IT Act). On receipt of the said application, the learned CIT, Exemption had issued letter through ITBA Portal calling for certain information/clarification so as enable him to process the application.

On receipt of the said questionnaire, the required information was filed by the assessee, on consideration of the said information, the learned CIT, Exemption gave a finding that the corpus donations collected during the financial years 2016-17, 2017-18 and 2018-19 shall form part of the taxable income in the absence of any registration under Section 12AA of the IT Act which the Appellant had failed to offer to tax and to pay tax thereon. Therefore, the learned CIT, Exemption was of the opinion that, the Appellant society was engaged in activities other than the charitable activities and, accordingly, denied the grant of registration under Section 12AA of the IT Act vide order.

It is a settled position of law that, at the time of grant of registration, the learned CIT, Exemption can only look into two aspects i.e. (i) whether the objects of the trust or society are charitable in nature and (ii) genuineness of the activities of the trust or society in the light of the law laid down by the Hon'ble Apex Court in the case of Ananda Social and Educational Trust vs. CIT. It is also equally settled position of law that, the grant of registration and assessment are two separate and distinct procedures prescribed under the Income Tax Act.

From the perusal of the impugned order, it is clear that the learned CIT, Exemption had denied the grant of registration by taking into consideration that the corpus donations collected in the preceding financial years had escaped assessment to tax which clearly falls under the realm of the assessment. In view of the settled position of law, present Tribunal is of the considered opinion that, the grounds on which the learned CIT, Exemption had rejected the grant of registration are untenable in law. Accordingly, the learned CIT, Exemption directed to grant the registration under Section 12AA of the Act. Appeal filed by the assessee stands allowed.

Tags : Registration Denial Validity

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