Tax Tribunal Grants Appeals for Registration and Approval of Charitable Trusts

The Tribunal allowed the appeals against the rejection of registration under section 12AA and approval under section 80G(5)(vi) of the Income Tax Act, 1961. The Tribunal emphasized that registration should not be refused solely based on the trust not commencing activities, especially when the trust's objects are charitable. It considered precedents where registration was granted to trusts at the commencement stage and directed the Commissioner to reconsider the applications in light of this discussion, ultimately leading to the approval of both appeals.

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Issues:
- Rejection of registration under section 12AA of the Income Tax Act, 1961.
- Rejection of approval under section 80G(5)(vi) of the Income Tax Act, 1961.

Analysis:
1. The appeals were filed against the orders of the Commissioner of Income Tax (Exemptions) rejecting the registration under section 12AA and approval under section 80G(5)(vi) of the Income Tax Act, 1961.
2. The grounds raised by the assessee highlighted the arbitrary nature of the orders and the failure to recognize charitable activities by the new trust.
3. The Trust applied for registration and approval on 31.03.2017 but faced rejection on 14.09.2017 due to lack of activities, leading to doubts about the trust's objects and genuineness.
4. The rejection was based on the trust not starting activities, as required for registration under section 12AA, and this decision was supported by a judgment of the Kerala High Court.
5. The assessee argued that as long as the trust's objects were charitable, registration should not be refused, citing relevant case law and emphasizing that the trust was at an early stage.
6. The Tribunal considered precedents where registration was granted to trusts at the commencement stage, emphasizing the limited powers of the Commissioner in such cases.
7. The Tribunal also referred to a judgment of the Allahabad High Court distinguishing a case where a trust had not performed charitable work.
8. Ultimately, the Tribunal directed the Commissioner to reconsider the applications for registration under section 12AA and approval under section 80G in light of the discussion, leading to the allowance of both appeals.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal principles applied, and the final decision reached by the Tribunal.

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