The Income Tax Appellate Tribunal (ITAT), Pune bench, directed a reexamination in respect of activities conducted by the assessee trust to obtain registration under Section 12AA of the Income Tax Act, 1961.
The assessee, Swamidham Jyotirling Sanstha, filed an appeal against the rejection of the application for the grant of registration under Section 12AA of the Act by the CIT(E).
Jayant Chandrachud, counsel for the Assessee, submitted that, in view of its objectives to undertake major activities in the field of the environment and science, and to work towards activities of social welfare, environmental balance, and health, the assessee trust is performing “Agnihotra.” Through this practice, the assessee would be contributing to global welfare and controlling environmental pollution.
Ajay Kumar Kesari, counsel for Revenue, argued that the activity of “Agnihotra” is nothing but an ancient fire ritual as mentioned in the Vedic writings and is largely found to be of a religious nature.
The Tribunal, while considering the appeal, observed that the main reason for which the registration was denied is the question of whether the assessee was undertaking charitable or religious activities.
Furthermore, the bench observed that the purpose of the provisions for the registration of trusts under Section 12AA and the granting of exemptions under Section 80G is derived from the Directive Principles of State Policy enshrined in the Constitution of India. These provisions enhance socio-economic welfare in society.
After reviewing the facts and records, the two-member bench of M. Balaganesh (Accountant Member) and Chandra Mohan Garg (Judicial Member) directed that one final opportunity should be provided to the assessee to file the relevant details before the CIT(E).
They also noted that further verification of facts is required regarding the activities of the assessee in accordance with Section 12AA of the Act by the CIT(E). Therefore, the bench directed a reexamination of the activities conducted by the assessee trust to obtain registration under Section 12AA of the Income Tax Act.
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