2017 (9) TMI 1812 - AT - Income Tax

ITAT grants 80G registration based on 12AA approval, upholding charitable purpose linkage.

Adesh Welfare Society (Regd.) Versus The C.I.T. (Exemptions) Chandigarh.

Adesh Welfare Society (Regd.) Versus The C.I.T. (Exemptions) Chandigarh. - TMI Issues:Appeal against rejection of application for registration u/s 80G of the Act.Analysis:The appellant, a registered society under section 12AA, appealed against the rejection of its application for registration under section 80G by the Ld. CIT(E). The crux of the appeal was the Ld. CIT(E)'s decision to reject the application. The appellant argued that its 12AA registration was still valid and that the 80G registration, which had expired in 2009, was being renewed. The appellant contended that it met the conditions for exemption under section 11 of the Act for various assessment years, and its surplus funds were reinvested back into the institution. The appellant cited legal precedents to support its claim that registration under 12AA was sufficient proof of charitable purpose. The Ld. CIT(E) raised objections regarding lack of recent donations and surplus funds, which the appellant countered with explanations about ongoing projects and investments in fixed deposits. The Ld. DR supported the lower authorities' decisions.The ITAT noted that the appellant's 12AA registration was valid and that it had previously held 80G registration until 2009. The appellant's returns for subsequent years claimed exemption under section 11, and the department had not rejected them. Citing legal precedents, the ITAT emphasized that registration under 12AA was indicative of charitable purpose, and the denial of 80G registration based on technicalities was unwarranted. The ITAT directed the Ld. CIT(E) to grant the appellant registration under section 80G from the date of application. The appeal was allowed based on judicial precedents and the facts of the case.In conclusion, the ITAT ruled in favor of the appellant, directing the Ld. CIT(E) to grant registration under section 80G from the date of application. The decision was based on the appellant's valid 12AA registration, compliance with exemption conditions under section 11, and legal precedents supporting the linkage between 12AA registration and charitable purpose. The ITAT highlighted the importance of considering the true purpose of an institution and not denying approvals based on technicalities. The judgment emphasized the continuity of exemption under section 80G and the significance of existing registrations in determining eligibility for benefits.