Income Tax Appellate Tribunal - Panji
The Mattapalli Chalamayya Charitable ... vs The Cit(Appeals)-1,, Guntur on 6 December, 2017
ITA No.234/Vizag/2017
Mattapalli Chalamayya Charitable Trust, Visakhapatnam
आयकर अपील य अ धकरण, वशाखापटणम पीठ, वशाखापटणम
IN THE INCOME TAX APPELLATE TRIBUNAL,
VISAKHAPATNAM BENCH, VISAKHAPATNAM
ी ड. मनमोहन, उपा य एवं
ी ड.एस. सु#दर %संह, लेखा सद'य के सम
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT &
SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A.No.234/Vizag/2017
( नधारण वष / Assessment Year: 2017-18)
Mattapalli Chalamayya CIT(Exemptions),
Charitable Trust Hyderabad
Visakhapatnam
[PAN No.AAETM5260C]
(अपीलाथ) / Appellant) (*+याथ) / Respondent)
अपीलाथ क ओर से / Appellant by : Shri C.R. Hemanth Kumar,
AR
याथ क ओर से / Respondent by : Shri B.C.S. Naik, DR
सुनवाई क तार ख / Date of hearing : 04.12.2017
घोषणा क तार ख / Date of Pronouncement : 06.12.2017
आदे श / O R D E R
PER D. MANMOHAN, Vice President:
This appeal by the assessee trust is directed against order of the
Commissioner of Income Tax (Exemptions), wherein the approval
claimed u/s 80G(5) of the Income Tax Act, 1961 (hereinafter called as
'the Act') was not accorded on the ground that the assessee has not
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ITA No.234/Vizag/2017
Mattapalli Chalamayya Charitable Trust, Visakhapatnam
undertaken much activity in accordance with the objects. The precise
reason given by the Ld. Commissioner reads as under:
"Since the trust has not undertaken much activities in accordance
with the objects and has recently started operations, it is not eligible for
approval u/s 80G(5)(vi) of the Act, having regard to the provisions of Sub-
Rule (2) to Rule 11AA of Income Tax Rules, 1962. Thus, it cannot be
granted approval u/s 80G(5)(vi) of the Act. Hence, the said application in
Form 10G filed by the applicant is rejected."
2. Ld. Counsel for the assessee submitted two paper books consisting
of copy of trust deed and income & expenditure statement, declarations
filed u/s 13(1) & 11(5) of the Act, etc.
3. Brief facts of the case are that the assessee trust had come into
existence by virtue of a trust deed dated 13th day of April, 2016 and it
was aimed at carrying on charitable activities such as providing medical
aid, to impart education, provide food and shelter to the poor & needy.
It has filed an application for registration u/s 12AA of the Act and also
seeking approval u/s 80G of the Act along with relevant declarations.
The Ld. Commissioner granted registration u/s 12AA of the Act.
However, with regard to the grant of approval u/s 80G of the Act, he
observed that the assessee did not carry much of its activity since
inception. In fact, the application for approval was made 3 months after
its inception and it cannot expect miracle in carrying out its activity
within such a short span. Assessee relied upon a decision of the ITAT,
Kolkata Tribunal reported in 53 ITR 629 (Trib.), wherein the bench
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ITA No.234/Vizag/2017
Mattapalli Chalamayya Charitable Trust, Visakhapatnam
observed that so long as the objects are charitable in nature,
registration u/s 12AA of the Act cannot be refused and carrying out of
charitable activity at the stage of commencement of institution was not
relevant.
4. On the other hand, the Ld. D.R. submitted that there should be a
gap between seeking approval u/s 12AA of the Act and for seeking
approval u/s 80G of the Act as per ITAT Lucknow bench order reported
in 2015 Tax Pub (DT) 5082 (Luck-Trib) as otherwise claim of approval
u/s 80G of the Act can be rejected.
5. We have carefully considered the rival submissions and perused
the records. The decision of the ITAT, Lucknow bench is not applicable
to the case on hand since, in the aforementioned case, the claim of the
assessee was rejected by the Tribunal on the ground that for grant of
approval, copy of registration granted u/s 12AA of the Act has to be
annexed and for such purpose, registration on an earlier date is
obligatory. However, in the instant case, the Ld. Commissioner has
already granted registration u/s 12AA of the Act and approval u/s 80G
was not rejected on the ground of not obtaining registration u/s 12AA of
the Act but only on the limited ground that no activity has been carried
out. The decision of the ITAT Kolkata Bench, as rightly been pointed
out by the Ld. Counsel, supports the stand of assessee that if the
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ITA No.234/Vizag/2017
Mattapalli Chalamayya Charitable Trust, Visakhapatnam
activities of the trust are genuine, at the stage of commencement of
institution, registration has to be granted automatically and claim u/s
80G of the Act can be followed with grant of registration. Ld.
Commissioner (Exemptions) did not reject the request of the assessee
for approval u/s 80G of the Act on the ground of not annexing the
registration certificate u/s 12AA of the Act but on the limited ground that
it has not undertaken much activity. At the inception of the institution,
one cannot expect serious activities, since it needs funds and to obtain
funds, the trust needs approval u/s 80G of the Act. Thus, the activities
are interlinked with obtaining approval. Hence, mere fact that the
assessee could not undertake much activity within the short span of 3
months, the Commissioner (Exemptions) should not have refused the
claim of approval u/s 80G(5) of the Act. Under the peculiar
circumstances, we direct the Ld. Commissioner to consider the issue
pragmatically and grant approval u/s 80G(5) of the Act, if all other
conditions are fulfilled.
6. In the result, the appeal filed by the assessee trust is allowed.
The above order was pronounced in the open court on 6th Dec'17.
Sd/- Sd/-
( ड.एस. सु#दर %संह) ( ड. मनमोहन)
(D.S. SUNDER SINGH) (D. MANMOHAN)
लेखा सद'य /ACCOUNTANT MEMBER उपा य /VICE PRESIDENT
4
ITA No.234/Vizag/2017
Mattapalli Chalamayya Charitable Trust, Visakhapatnam
$वशाखापटणम /Visakhapatnam:
(दनांक /Dated : 06.12.2017
VG/SPS
आदे श क त*ल$प अ+े$षत/Copy of the order forwarded to:-
1. अपीलाथ / The Appellant - The Mattapalli Chalamayya Charitable Trust, 37A,
Pandurangapuram, Visakhapatnam
2. याथ / The Respondent - The CIT (Exemptions), Hyderabad
3. आयकर आय,
ु त (अपील) / The CIT (A), Visakhapatnam
4. $वभागीय त न/ध, आय कर अपील य अ/धकरण, $वशाखापटणम /
DR, ITAT, Visakhapatnam
5. गाड फ़ाईल / Guard file
आदे शानस
ु ार / BY ORDER
// True Copy // Sr. Private Secretary ITAT, VISAKHAPATNAM 5