Tribunal grants registration and approval under Income Tax Act, emphasizes compliance and proper evaluation.

The Tribunal overturned the denial of registration under section 12AA and approval under section 80G(5) of the Income Tax Act. It found the objections regarding premature application invalid, emphasizing that registration should be granted from the application date. The Tribunal highlighted the need for the assessing officer to properly evaluate the trust's charitable objects. The denial of approval under section 80G was set aside, with directions for a fresh evaluation of the registration application and approval request, stressing the importance of compliance and cooperation from the appellant.

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Issues: Denial of registration u/s. 12AA and approval u/s. 80G(5) of the Income Tax Act, 1961

Denial of Registration u/s. 12AA:
The appellant, a Trust formed in 2016, contested the denial of registration u/s. 12AA and approval u/s. 80G(5) by the CIT(E) due to non-compliance and premature application concerns. The denial was based on the Income Tax Officer's report stating the application was premature as the trust's activities had not commenced. However, the Tribunal disagreed, emphasizing that registration should be granted from the application date and any income received before registration would not qualify for exemption u/s. 11. The Tribunal found the objection of premature application invalid, stating that activities were contemplated, evidenced by the ongoing construction for educational purposes. The Tribunal highlighted the necessity for the CIT(E) to assess the trust's objects for charitable purposes under the Act, which was not adequately addressed in the original order, rendering it inchoate. The Tribunal also criticized the lack of compliance by the assessee but acknowledged the promise of cooperation for fresh consideration.

Approval u/s. 80G(5):
The denial of approval u/s. 80G was deemed consequential to the registration denial. The Tribunal set aside the order denying approval, requiring reconsideration once the registration application is re-evaluated. The Tribunal directed the CIT(E) to review the registration application afresh, emphasizing the need for full cooperation from the appellant. The Tribunal concluded by allowing the appeals for statistical purposes, setting aside both the registration and approval denials.

In conclusion, the Tribunal found the original order denying registration and approval unsustainable in law due to premature application concerns, inadequate assessment of charitable objects, and procedural flaws in the show cause process. The Tribunal directed a fresh evaluation of the registration application and approval request, emphasizing compliance and cooperation from the appellant for a comprehensive review.

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