The New Delhi bench comprising of Judicial Member Kuldip Singh and Accountant Member R. K. Panda held that CIT was not justified in rejecting the claim of registration under Section 12AA of the Income Tax Act, 1961 to trust merely on the ground of non-production of books and vouchers.
Assessee contested the appeal before ITAT against the order passed by CIT (E) u/s 12AA (1) (b)(ii) denying the registration sought by the assessee under Section 12A(1) of the Income Tax Act.
On appeal, the first appellate authority concluded the matter in favour of the assessee by holding that the assessee society has not carried on any charitable activities and on the ground of not producing the books and voucher CIT (A) accordingly rejected the claim of assessee for grant of registration.
Not satisfied with the decision of CIT (A) assessee carried the matter before ITAT wherein the assessee had enclosed all the relevant documents and drew the attention of various tribunal bench decision regarding the issue.
The assessee during the tribunal procedure argued that CIT (A) can grant the registration on the premise of looking at the objects of the society and pointed that they took improper way to examine the aspect of application of income at the stage of granting registration u/s 12AA, which is to be examined by the AO on a year basis for claiming exemptions.
Assessee relied on various decisions of tribunal and High Court which support his case. Finally the bench held that CIT was not justified in rejecting the claim of registration and directed the CIT (A) to allow registration u/s 12A of the I.T. Act.
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