2015 (10) TMI 1395 - AT - Income Tax

Tribunal overrules denial of approval based on land registration, directs grant

The Tribunal allowed the appeal, directing the grant of approval under section 80G(5)(vi) to the appellant institution. The denial of approval by the ... Grant of approval u/s 80G(5)(vi) rejected - land required by appellant for establishing its activities has not yet been registered in its name - AR submitted that when appellant has been registered as a charitable institution u/s 12AA of the Act and there is no doubt with regard to charitable object of appellant, denial of approval u/s 80G(5) is illegal - Held that:- A plain reading of section 80G(5) would make it clear that approval can be granted under clause (vi) if the conditions of clause (i) to (v) are fulfilled. On a perusal of the impugned order of ld. DIT(E) it is evident, the only reason on which he denied approval is land required by appellant for establishing its activities has not yet been registered in its name. There is absolutely no allegation by the ld. DIT(E) that appellant has not fulfilled any of the conditions of clause (i) to (v) of section 80G(5). Furthermore, there is no dispute the fact that appellant is a charitable institution with charitable objects, as ld. DIT(E) himself has granted registration to appellant u/s 12AA. That being the case, we are of the view, ld. DIT(E) was not correct in rejecting appellant’s application for grant of approval u/s 80G(5). Moreover, in course of hearing, ld. AR has submitted that in the meantime land has also been registered in the name of the society. Therefore, the objection of ld. DIT(E), as it appears, has also been taken care of . In aforesaid view of the matter, we set aside the impugned order of ld. DIT(E) and direct him to grant approval u/s 80G(5)(vi). - Decided in favour of assessee. Issues:1. Denial of approval u/s 80G(5)(vi) by DIT(E) based on non-registration of land in the name of the appellant institution.2. Legal implications of registration u/s 12AA and fulfillment of conditions under section 80G(5) for approval.Analysis:1. The appeal challenged the rejection of the appellant's application for approval u/s 80G(5)(vi) of the IT Act by DIT(E) due to the non-registration of land in the name of the appellant institution. Despite being registered under the AP Societies Registration Act for charitable purposes and obtaining registration u/s 12AA, the denial was based on the absence of land registration, even though funds were received. The ld. AR contended that once a trust is registered u/s 12AA and meets conditions under section 80G(5), approval cannot be refused. The DIT(E) decision was solely focused on the land registration issue.2. Upon review, the Tribunal noted that the denial of approval was solely due to the non-registration of land, with no allegations of non-compliance with conditions under section 80G(5). The Tribunal emphasized that the appellant was a charitable institution with approved registration u/s 12AA, indicating compliance with charitable objectives. The ld. DIT(E)'s rejection was deemed incorrect, especially as the appellant had subsequently registered the land. Consequently, the Tribunal set aside the DIT(E)'s order and directed the grant of approval u/s 80G(5)(vi) to the appellant, as the land registration issue had been resolved.In conclusion, the appeal was allowed, and the Tribunal directed the grant of approval u/s 80G(5)(vi) to the appellant, emphasizing the compliance with charitable objectives and the resolution of the land registration issue.