Tribunal grants tax exemption approval under section 80G following appellant's compliance with registration and conditions.

The Tribunal reversed the CIT (Exemption)'s rejection of the appellant's application for approval under section 80G(5)(vi) of the Income Tax Act. The Tribunal emphasized the significance of the appellant's registration under section 12AA and held that once registered, benefits under the Act should not be denied. The appellant's compliance with the conditions under section 80G(5) was found satisfactory, leading to the grant of approval under section 80G to the appellant.

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Issues:
1. Appeal against order of CIT (Exemption) under section 80G(5)(vi) of the Income Tax Act.
2. Rejection of application for approval under section 80G(5)(vi) by CIT (Exemption).
3. Justification for rejecting the appellant's application.
4. Compliance with requirements for approval under section 80G(5) of the Act.
5. Legal implications of registration under section 12AA in relation to approval under section 80G(5).

Issue 1: Appeal against order of CIT (Exemption) under section 80G(5)(vi) of the Income Tax Act

The appellant filed an appeal against the order of the ld. CIT (Exemption), Lucknow, dated 13/7/2018, under section 80G(5)(vi) of the Income Tax Act. The grounds raised included the lack of proper hearing before the order, the treatment of activities as non-charitable despite being a registered entity under section 12AA, and the sustainability of the order due to the submission of all relevant evidence by the appellant.

Issue 2: Rejection of application for approval under section 80G(5)(vi) by CIT (Exemption)

In the impugned order, the ld. CIT(E) rejected the appellant's application for approval under section 80G(5)(vi) based on the lack of satisfactory material regarding the genuineness of the activities claimed by the appellant. The CIT emphasized that the mere submission of documents, including the trust deed, was not sufficient to prove the charitable nature of the activities. The CIT found a lack of evidence supporting the claimed activities and expenses, leading to doubts about the genuineness of the appellant's charitable endeavors.

Issue 3: Justification for rejecting the appellant's application

The ld. counsel for the appellant argued that the rejection of the application by the CIT (Exemption) was erroneous as the appellant was duly registered under section 12AA, and there was no change in the nature of activities performed. The appellant contended that the CIT's observation regarding engagement in the business of education was unjustified, and the entire evidence concerning the activities was submitted but ignored by the CIT. The appellant challenged the sustainability of the impugned order on legal grounds.

Issue 4: Compliance with requirements for approval under section 80G(5) of the Act

The Tribunal analyzed relevant judicial opinions, including the cases of "Hiralal Bhagwati vs. CIT" and "N.N. Desai Charitable Trust vs. CIT," emphasizing that once registration under section 12AA is granted, benefits under the Act should not be denied. The Tribunal noted that the CIT should focus on whether the trust is registered under section 12A and fulfills the prescribed conditions for certification under section 80G, without delving into the actual assessment of income. Relying on precedent, the Tribunal held that the CIT was unjustified in rejecting the appellant's application for approval under section 80G(5) despite the continuous registration under section 12AA and compliance with conditions under section 80G(5)(i) to (v) of the Act.

Issue 5: Legal implications of registration under section 12AA in relation to approval under section 80G(5)

The Tribunal reversed the order under appeal, directing the grant of approval under section 80G of the Act to the appellant. The decision was based on the undisputed registration under section 12AA, fulfilling conditions under section 80G(5), and following established legal principles from previous judgments. The Tribunal concluded that the appellant met the requirements for approval under section 80G(5) despite the CIT's rejection, emphasizing the significance of registration under section 12AA in determining eligibility for benefits under the Income Tax Act.

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