Income Tax Appellate Tribunal - Delhi
Sai Ashish Charitable Trust, New Delhi vs Assessee on 20 June, 2014
1 ITA No. 5501/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G' NEW DELHI
BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER
AND
SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER
ITA No. 5501/Del/2012
Assessment Year: -----
Sai Ashish Charitable Trust, v DIT(Exemptions),
Aline D Silva, Plot No. 15, 3rd Floor,
C2C/2/239-B, Aayakar Bhawan,
Janakpuri, Laxmi Nagar District Centre,
New Delhi. Delhi-110092
(PAN: AAITS7425B)
(Appellant) (Respondent)
Appellant by: Shri Anil Kumar Goel
Respondent by: Shri Ramesh Chandra, CIT DR
ORDER
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal has been preferred against the order of the DIT(E), Delhi dated 27.8.2012 passed u/ 12AA(1)(b) r/w section 12A of the Income Tax Act, 1961 (for short the Act).
2. Although the assessee appellant has taken as many as seven grounds in this appeal but except ground no. 1, other grounds are argumentative and supportive to the main ground no. 1 which reads as under:-
"1. That ld. DIT, HQ (Exemption) has totally erred in refusing registration u/s 12A of the Income Tax Act, 1961 and consequential exemption u/s 80FG of the Income Tax Act."2 ITA No. 5501/Del/2012
3. Briefly stated the facts giving rise to this appeal are that the assessee trust was created vide trust deed dated 26.09.2009 with the object to carry out charitable activities. The assessee trust applied for registration u/s 12A and 80G of the Act vide application dated 17.2.2012 on Form No. 10A and Form No. 10G respectively. The DIT(E) denied registration on the interpretation of the facts and by stating that the activities carried out by the assessee trust do not match to the tune of donations received and, therefore, the activities were not genuine. Now the aggrieved assessee trust is before this Tribunal with the main ground as reproduced hereinabove.
4. We have heard rival arguments of both the parties and carefully perused the record placed before us.
5. Ld. AR submitted that the DIT(E) has failed to point out that the activities done by the trust are not genuine. The AR further submitted that DIT(E) erred in passing impugned order by considering the quantum of expenditure with respect to donation collection and in holding that since the quantum of expenditure is much below in comparison to the receipt and therefore, the activities are not genuine. The AR further contended that the DIT(E) was not justified in pointing out as to what wrong the assessee trust has done by accumulating funds as per provisions of the Act. 3 ITA No. 5501/Del/2012
6. Ld. AR placed reliance on the recent decision of Hon'ble Jurisdictional High Court of Delhi in the case of DIT vs Foundation of Ophthalmic & Optometry Research Education Centre (2013) 355 ITR 361 (Del) and submitted that the registration u/s 12A of the Act is not dependent on commencement of charitable activity and non-commencement of charitable activity cannot be a valid ground for rejection of application u/s 12A of the Act. The AR also placed reliance on the decision of Hon'ble High Court of Allahabad in the case of CIT vs R.S. Bajaj Society (2014) 222 Taxman 111 (Allahabad) and submitted that while granting of registration u/s 12A of the Act, only genuineness of the object are to be seen. The registration authority is not required to verify the activities of the trust while granting registration u/s 12A of the Act. The AR vehemently contended that only the genuineness of the objects was to be tested at the time of registration and not the activities which were not commenced by that time.
7. Replying to the above, ld. DR supported the impugned order and submitted that the assessee trust had number of aims and objects for charitable purposes and the assessee trust has not done any charitable activities towards such objects which could establish that the assessee trust is doing genuine charitable activities but the assessee trust spent a meager 4 ITA No. 5501/Del/2012 amount on education support which cannot be held as a genuine act of charity. Therefore, the DIT(E) rightly denied registration u/s 12A as well as 80G of the Act.
8. On careful consideration of above rival contentions and submissions of both the parties and careful perusal of record, inter alia the impugned order, we clearly observe that the DIT(E) has not pointed out any defect or doubt about the charitable objects of the assessee trust. From the impugned order, we clearly observe that the DIT(E) has rejected the application of the assessee trust for grant of registration u/s 12A of the Act by holding that in absence of any genuine charitable activity, the genuineness of the charitable activities cannot be held to be established. At the same time, we observe that as per ratio of the decision of Hon'ble Jurisdictional High Court of Delhi in the case of DIT vs Foundation of Ophthalmic & Optometry Research Education Centre (supra), registration u/s 12A is not dependent on commencement of charitable activity. The registration granting authority is not required to examine the question whether the trust has actually commenced and carried on its charitable activities. We also take cognizance of decision of Hon'ble High Court of Allahabad in the case of CIT v R.S.Bajaj Society (supra) as relied by the assessee appellant, wherein their 5 ITA No. 5501/Del/2012 lordships held that at the time of registration only genuineness of the objects was to be tested, not the activities which were not commenced by that time.
9. In view of above, we hold that the DIT(E) rejected the application of the assessee for registration u/s 12A of the Act on wrong premise and unjustified grounds. At the cost of repetition, we note that while the DIT(E) has not raised any doubt or objection about the charitable objects of the assessee trust, registration u/s 12A cannot be denied on the ground that the genuineness of the charitable activities cannot be held to be established in absence of any genuine charitable activity. Accordingly, sole ground of the assessee trust is allowed and, consequently, the impugned order is set aside by directing the DIT(E) to grant registration u/s 12A of the Act for the assessee trust.
10. Since the application for registration u/s 80G of the Act was consequently rejected without considering the merits, therefore, the DIT(E) is directed to reconsider the same as per provisions of the Act by affording due opportunity of hearing for the assessee.
11. In the result, the appeal of the assessee is allowed in the terms as mentioned hereinabove.
6 ITA No. 5501/Del/2012
Order pronounced in the open court on 20.06.2014.
Sd/- Sd/-
(S.V. MEHROTRA) (CHANDRAMOHAN GARG)
ACCOUNTANT MEMBER JUDICIAL MEMBER
DT. 20th JUNE 2014
'GS'
Copy forwarded to:-
1. Appellant
2. Respondent
3. Commissioner of Income Tax(A)
4. CIT. 5. DR
By Order
Asstt. Registrar