Tribunal orders registration & approval for trust despite delay & initial rejection

The Tribunal allowed the appeal, directing the DIT(E) to grant registration under section 12A of the Act and approval under section 80G to the trust, despite a delay in filing the appeal and initial rejection based on non-commencement of activities. The Tribunal found the rejection unjustified, noting no adverse findings on the trust's activities and financial statements. It clarified that commencement of business is not a prerequisite for registration, and ordered approval based on evidence of the corpus fund being deposited.

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Issues:
Delay in filing appeal, refusal to grant registration under section 12AA of the Act, non-commencement of activities by the trust.

Delay in filing appeal:
The appeal was filed by the assessee trust against the Order of the DIT(E), Hyderabad, refusing registration under section 12AA of the Act. There was a delay of 28 days in filing the appeal, for which the assessee submitted a delay condonation petition along with an affidavit explaining the reasons. The Tribunal considered the reasons and decided to condone the delay, admitting the appeal for hearing on merit.

Refusal to grant registration under section 12AA of the Act:
The assessee trust had applied for registration under section 12A and approval under section 80G before the DIT(E). The applications were initially rejected by the DIT(E) on the grounds of non-commencement of activities by the trust. The ITAT, in a previous order, had remitted the matter back to the DIT(E) to verify the genuineness of the activities carried out by the assessee. However, the DIT(E) again rejected the applications citing the same reason of non-commencement of activities, disregarding the Tribunal's directions. Despite the assessee providing details of its activities and financial statements, the DIT(E) rejected the applications. The Tribunal found that there was no adverse finding on the genuineness of the trust's activities and financial statements. Therefore, it directed the DIT(E) to grant registration under section 12A and approval under section 80G to the assessee, as the rejection was deemed unjustified.

Non-commencement of activities by the trust:
The DIT(E) rejected the applications primarily on the ground that the trust had not commenced its activities. However, the Tribunal clarified that the commencement of business by the trust is not a prerequisite for registration under section 12A and approval under section 80G of the Act. The DIT(E) had asked for specific details of activities and financial records, noting discrepancies in the account balances. Despite the DIT(E) claiming that there were no outgoing expenditures during the relevant financial years and that the corpus fund was not deposited in the trust's bank account, the Tribunal found evidence that the corpus fund was indeed deposited in a fixed deposit account. The Tribunal, based on the facts and circumstances, directed the DIT(E) to grant the registration and approval to the assessee.

In conclusion, the Tribunal allowed the appeal of the assessee, directing the DIT(E) to grant registration under section 12A of the Act and approval under section 80G, subject to fulfilling the specified conditions.

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