Registration u/s 12AA of Income Tax Act can't be denied if Charitable Trust is genuinely performing its object of imparting Education: ITAT [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that the registration under Section 12AA of the Income Tax Act, 1961 cannot be denied if the charitable trust is genuinely performing its object of imparting education.

The assessee is a society registered under the Rajasthan Societies Registration Act, of 1958 having its main object of imparting education. The Society runs a college in the name of Apex College affiliated with Maharshi Dayanand Saraswati University, Ajmer.

The Application in Form No. 10A seeking registration under Section 12AA of the Income Tax Act was filed by the assessee online along with all necessary annexures as required under Rule 17A. The application was rejected by the Commissioner of Income Tax (Exemption) [CIT(E)].

The Authorized Representative submitted that in the course of proceedings for the grant of approval, extensive details were sought by CIT(E)i.e. as many as 26 queries were raised by CIT(E). All 26 queries were duly responded to by submitting appropriate explanations. The Appellant Society also submitted audited financial statements for the immediately preceding three years.

The CIT(E) for the reason of non-submission of reconciled fee details rejected the application and stated that in the absence of such details, it is not possible to record satisfaction regarding the genuineness of activities. The assessee filed a detailed written submission with the prayer to set aside the order of the CIT(E) by granting registration under Section 12AA of the Income Tax Act and thus the appeal may kindly be allowed.

The Two-member bench comprising of S. Seethalakshmi (Judicial member) and Rathod Kamlesh Jayantbhai (Accountant member) held that the bench does not concur with the findings of the CIT(E) denying the exemption under Section 12AA of the Income Tax Act to the assessee when the assessee trust under the umbrella of Dayanand Saraswati University, Ajmer is genuinely performing its activities and objects of imparting education to the students coming off from poor or middle-class families.

Thus, the appeal of the assessee trust was allowed with the direction to the CIT(E) to register the trust under Section 12AA of the Income Tax Act.

To Read the full text of the Order CLICK HERE

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