Shri Shirdi Sai Darbar Charitable Trust (Dharamshala) Vs. CIT(Exemptions), I.T.A. No. 692/CHD/2015, Date of Pronouncement: 08.06.2016, ITAT – Chandigarh
Whether CIT (Exemptions) can reject the application for registration u/s 12AA of the Income Tax Act,1961 on the grounds that the assessee has not filed any ITR and the clause of memorandum provide absolute powers to the trustees to manage the property of the trust which may attract the provision of Section 13(1)(c) of the Act?
The assessee is a charitable trust filed an application for registration u/s 12A before the CIT(exemption),Chandigarh. After providing the opportunity of being heard the CIT(exemptions) have denied the application on the ground that the assessee has not filed any ITR yet and the clause of memorandum provide absolute powers to the trustees to manage the property of the trust which may attract the provision of Section 13(1)(c) of the Act.
Hon’ble ITAT held that the condition which CIT(Exemptions) has to satisfy while granting the registration u/s 12A of the Income Tax Act,1961 are that the objects of the assessee are charitable in nature and the activities are genuine. There are no adverse remarks made by the CIT (Exemptions) with regard to objects of memorandum. Since the assessee has not filed its ITR it cannot be said the activities are not genuine. Moreover, section 13 comes into play at the time of granting exemption u/s 11 and not for granting exemption u/s 12A of the Act. Hence the appeal of the assessee is allowed.
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