Trust granted exemption under section 80G after initial rejection; ITAT directs CIT to allow exemption

The ITAT Agra allowed the appeal of a charitable trust against the rejection of registration under section 80G of the Income Tax Act, 1961 by the CIT-1. Despite earlier granting registration under section 12AA, the CIT rejected the trust's application for exemption under section 80G(5). The ITAT held that it was unjust to deny the exemption after recognizing the trust as charitable. Following a precedent from the Gujarat High Court, the ITAT directed the CIT-1 to grant the trust the benefit of exemption under section 80G(5), resulting in the appeal being allowed.

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Issues involved: Appeal against rejection of registration u/s 80G of the Income Tax Act, 1961 for a charitable trust.

Summary:
The appellant, a charitable trust, appealed against the rejection of registration u/s 80G of the Income Tax Act, 1961 by the ld. CIT-1. The trust had applied for exemption under section 80G(5) of the Act, but the CIT rejected the application citing failure to establish the genuineness of its activities. However, the same CIT had earlier granted registration under section 12AA to the trust, recognizing it as a charitable trust. The appellant argued that denying the benefit of exemption under section 80G(5) after granting registration under section 12AA is unjust. After considering the orders and relevant case law, the ITAT Agra held that since the CIT had already granted registration under section 12AA after verifying the trust's activities, it was improper to reject the application for exemption under section 80G(5). Citing a similar case from the Hon'ble Gujarat High Court, the ITAT directed the CIT-1, Agra to grant the appellant trust the benefit of exemption under section 80G(5) of the Act. Consequently, the appeal filed by the trust was allowed.

(Order pronounced in the open Court on 18.03.2011).

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