2012 (11) TMI 1187 - AT - Income Tax

ITAT rules in favor of assessee in registration & approval appeals, citing procedural errors

The Income Tax Appellate Tribunal (ITAT) ruled in favor of the assessee in two appeals against the CIT-I, Agra's orders rejecting registration under ... Rejection of application for grant of registration u/s 12AA - rejection of application for grant of approval u/s 80G(5)(vi) - Held that - CIT did not act according to law and provisions of section 12AA & 80G of the Act. CIT Agra has not conducted any enquiry into the matter in order to satisfy himself about the genuineness of the activities of the assessee institution or fund;and the order was passed without giving opportunity of being heard to the assessee and the impugned order is passed beyond the period of 6 months from the date of filing of application which violated section 12AA of the Act. The orders of CIT for refusal of registration under section 12AA of the Act and refusal of approval under section 80G of the Act was set aside. - CIT directed to grant registration under section 12AA and renewal of approval under section 80G(5)(vi) - Decided in favor of assessee. Issues:1. Rejection of application for grant of registration under section 12AA of the Income Tax Act, 1961.2. Rejection of application for grant of approval under section 80G(5)(vi) of the Income Tax Act.Analysis:The judgment involves two appeals filed by the assessee against orders by the CIT-I, Agra, dated 21.06.2012. The first appeal pertains to the rejection of the application for registration under section 12AA, and the second appeal relates to the rejection of the application for approval under section 80G(5)(vi) of the Act. The CIT rejected both applications citing lack of charitable activities by the assessee trust and failure to satisfy himself about the genuineness of the trust's activities. The assessee contended that no opportunity of hearing was provided, and the orders were illegal and against the law.The Authorized Representative referred to a previous ITAT order directing the CIT to grant renewal of approval under section 80G(5)(vi) and allow registration under section 12AA for another trust. The Departmental Representative relied on the CIT's orders. The ITAT examined the case and found that the CIT did not follow the procedure laid down in section 12AA for granting registration to a trust. The CIT did not apply his mind before rejecting the applications and approved orders put up by subordinates, which cannot be considered valid under the Act.The ITAT referred to the RTI reply indicating uncertainty about the CIT's presence during the hearing and noted the trust's objects and winding-up clause. Based on the facts and relevant provisions, the ITAT concluded that the CIT's orders were not in accordance with the law. Citing a similar case precedent, the ITAT set aside the CIT's orders and directed the grant of registration under section 12AA and approval under section 80G(5)(vi) from the requested dates. As the orders were not passed within the stipulated time, the ITAT ruled in favor of the assessee, allowing both appeals.In conclusion, the ITAT found the CIT's orders to be unlawful and directed the CIT to grant the requested registration and approval to the assessee trust. The judgment emphasized the importance of following the prescribed procedures under the Income Tax Act for granting such registrations and approvals, ensuring fair treatment to the trusts applying for the same.