The Income Tax Appellate Tribunal (ITAT), Bangalore bench while allowing the application for the registration held that the registration has to be granted if there is no evidence to show activities of the trust are not being carried out genuinely.
The assessee, Teachers Academy Education Trust is a trust which came into existence under the Deed of Trust. The deed of trust was amended by another trust deed. The objects of trust were to establish educational institutions for providing training in professional, technical, information technology, medical, and general education from nursery to degree classes and also higher education.
There was a survey conducted on the premises of the assessee. At the time of the survey, it was noticed that the assessee had not obtained registration under section 12AA of the Act and had also not filed returns of income for several years. These findings were communicated by the DDIT(Inv.) who conducted the survey to the AO.
On legal advice, the assessee made an application for grant of registration under section 12A of the Act. The assessee accordingly filed Form 10A seeking registration under section 12AA of the Act. The assessee also filed returns of income for Assessment Years 2016-17 and 2017-18. In the return of income so filed, in anticipation of the grant of registration under section 12AA of the Act, the assessee had also claimed exemption under section 11 in respect of surplus of income over expenditure for the aforesaid assessment years.
The CIT(E) rejected the application for grant of registration. Against such an order, the assessee filed an appeal before the ITAT challenging the refusal of registration. The Tribunal set aside the order of CIT(E) and remanded the plea of the grant of registration to the CIT(E) for consideration afresh.
The assessee submitted that its objects are to provide an education which was a charitable object within the meaning of section 2(15) of the Act. The assessee also pointed out that as per the statement of accounts, receipts and outgoings clearly indicated that trust was carrying out the objects of running educational institutions.
The assessee thus pointed out that it has satisfied all the conditions for grant of registration under section 12A of the Act and therefore registration should be granted.
The provisions of section 12AA(1) of the Act shows that before the grant of registration, the CIT(E) has to satisfy himself about the genuineness of the activities of the trust and also about the objects of the trust, whether it is charitable in nature or not.
The coram headed by N.V.Vasudevan noted that the CIT(E) has fallen into an error in concluding that the assessee did not adhere to the directions of the Tribunal and provide the necessary clarification.
The ITAT found that the assessee has also given clarification on other aspects, which will have a bearing on the grant of registration under section 12A of the Act. In the impugned order, the CIT(E) has neither dealt with those contentions nor has he found those contentions to be not correct.
In these circumstances, the ITAT viewed that the assessee should be given the benefit of registration under section 12AA of the Act.
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