2017 (12) TMI 868 - AT - Income Tax

Tribunal Grants Charitable Status: Registration Certificate Issued, Erroneous Order Cancelled

Trisha Welfare Society Versus Commissioner of Income-tax (Exemption)

The Tribunal allowed the assessee's appeals, overturning the CIT (Exemption)'s decisions. The Tribunal directed the issuance of the registration ... Registration under section 12AA denied - proof of charitable activities - Held that:- Assessee has sufficiently proved with evidence on record that the object of Society are charitable in nature and in pursuance of the said objects it has set up a College where the society is imparting education in a systematic manner in the field of B.Sc. (Nursing) and G.N.M (General nursing and Midwifery). We are unable to approve the view adopted by the ld CIT (E) that assessee has not been able to prove the charitable nature of its objects and genuineness of activities. We, therefore, reverse the findings recorded by the CIT (E) in this regard being based on no evidence and in complete ignorance of material on records. We, therefore, direct the CIT (E) to issue Certificate granting registration under section 12AA in the name of the applicant society, forthwith from the financial year in which application was filed. - Decided in favour of assessee. Issues Involved:1. Rejection of application for registration under section 12AA of the Income Tax Act.2. Refusal to rectify the order under section 154 of the Income Tax Act.Detailed Analysis:1. Rejection of Application for Registration under Section 12AA:The assessee challenged the rejection of their application for registration under section 12AA by the CIT (Exemption), Lucknow. The grounds of appeal included errors in facts and law, incorrect assumptions, and non-compliance with notices. The CIT (Exemption) rejected the application on the basis that the society did not respond to specific queries and notices sent on 29.05.2015, 11.06.2015, and 14.07.2015. The CIT (Exemption) also concluded that the society was not carrying out any charitable activities and failed to prove the charitable purpose and genuineness of its activities.The Tribunal noted that the society was formed to provide systematic training in paramedical courses and had set up a Nursing School/College. The society provided education in B.Sc. (Nursing) and G.N.M (General Nursing and Midwifery) courses, which qualifies as a charitable object under section 2(15) of the IT Act. The Tribunal found that the society had complied with the notice dated 29.05.2015 by sending a detailed reply via speed post, which was confirmed by the track report from India Post. The Tribunal also noted that the society had not received the notice dated 11.06.2015, and this was not rebutted by the CIT (Exemption) with any evidence.The Tribunal observed that the society had provided sufficient material to prove its charitable purpose and genuineness of activities. The society had submitted various documents, including the PAN card, consent of affiliation from the university, registration certificate, memorandum, audit reports, income and expenditure accounts, and balance sheets. The Tribunal found that the CIT (Exemption) had not commented adversely on the objects of the society and that the society had provided evidence of its educational activities, including running a college with necessary infrastructure.The Tribunal also noted that the ITO (Exemption) had conducted an enquiry and found the society fit for registration under section 12AA. The ITO's report, obtained under the RTI Act, confirmed that the society was genuinely pursuing its charitable objects. The Tribunal concluded that the CIT (Exemption) had erred in rejecting the application for registration and directed the CIT (Exemption) to issue the registration certificate forthwith.2. Refusal to Rectify the Order under Section 154:The assessee also challenged the refusal to rectify the order under section 154. The grounds of appeal included errors in facts and law, mistaken assumptions, and failure to consider the facts brought on record. The Tribunal noted that the order under section 12AA, dated 06.08.2015, had been cancelled. Consequently, the order passed under section 154 in consequence to the order dated 06.08.2015 was also cancelled.Conclusion:The Tribunal allowed both appeals of the assessee, reversing the findings of the CIT (Exemption) and directing the issuance of the registration certificate under section 12AA. The Tribunal also cancelled the order under section 154, as it was based on the now-cancelled order under section 12AA.