The Surat bench of the Income Tax Appellate Tribunal (ITAT) has ruled that trusts with minor mismatches in their names will not be denied registration under section 12AB of the Income Tax Act, 1961. The ITAT held that such mismatches are not fatal and that the trusts should be granted registration if they are otherwise eligible.
Six assessee-trusts appealed against the Commissioner of Income Tax (Exemption) (CIT(E))’s rejection of their applications for registration under section 12AB of the Income Tax Act, 1961. The trusts had applied for tax exemption under this section but were rejected due to minor mismatches with their PAN, certificate of registration with the Charity Commissioner, and other documents.
The assessee-trusts appealed to the ITAT, arguing that their names were not indicative of their charitable purpose.
The assessee-trusts argued that minor name mismatches were not fatal, as their names still indicated their charitable purpose. They cited Surat Maisuriya Bhatia Nayi Panch, a trust providing journalist welfare, as an example. They also cited their registration with the Charity Commissioner, demonstrating their genuineness and track record of charitable activities.
The CIT(E) argued that minor mismatches in trust names were not insignificant and did not indicate their charitable purpose. They also argued that the assessee-trusts did not provide sufficient evidence to prove their genuineness and track record of charitable activities.
The Tribunal observed minor mismatches in trust names were not fatal, as they still indicated their charitable purpose. The assessee-trusts were registered with the Charity Commissioner, proving their authenticity and track record of charitable activities. The CIT(E) did not provide evidence to suggest these mismatches would mislead the public or hinder the trusts’ charitable activities.
The Two Bench members Pawan Singh (Judicial Member) and Dr. A.L. Saini (Accountant Member) allowed the appeals of the assessee-trusts and held that they were eligible for registration under section 12AB of the Income Tax Act and also directed the CIT(E) to go through the relevant documents and evidence to verify the objects of the trust and activities of the trust.
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