Tribunal grants registration & recognition to charitable institution under Income Tax Act, emphasizing bookkeeping not mandatory.

The Tribunal set aside the denial of registration under section 12A of the Income Tax Act, directing the registration of the assessee as a charitable institution. Similarly, the denial of recognition under section 80G was overturned, instructing the CIT(E) to grant recognition to the assessee. The Tribunal emphasized that physical books of account and vouchers were not mandatory for registration and recognition. The Assessing Officer was reminded to verify compliance during assessment proceedings despite the granted registrations.

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Issues:
1. Denial of registration u/s.12A of the Act
2. Denial of recognition u/s.80G of the Act

Analysis:

Issue 1: Denial of registration u/s.12A of the Act
The assessee appealed against the denial of registration u/s.12A of the Act by the CIT(E), Hyderabad. The assessee's representative argued that all required evidences, including audited accounts, were submitted before the CIT(E) during the hearing. It was contended that physical books of account and bills and vouchers were not mandatory under Rule 17A for registration u/s.12A. The Tribunal observed that the statutory audit report and necessary documents were provided to the CIT(E), fulfilling the requirements. The Tribunal held that the denial of registration was unjust as the assessee had complied with all necessary conditions. Consequently, the order denying registration u/s.12A was set aside, directing the registration of the assessee as a charitable institution.

Issue 2: Denial of recognition u/s.80G of the Act
The denial of recognition u/s.80G was also challenged by the assessee based on similar grounds regarding the production of physical books of account and bills and vouchers. The Tribunal noted that since registration u/s.12A had been granted and statutory audit reports were submitted, the denial of recognition u/s.80G was unfounded. It was emphasized that physical books and vouchers were not mandatory for recognition u/s.80G. Therefore, the order denying recognition u/s.80G was set aside, directing the CIT(E) to grant recognition to the assessee. The Tribunal clarified that the grant of recognition u/s.80G did not exempt the Assessing Officer from verifying compliance during assessment proceedings.

In conclusion, both appeals of the assessee were allowed, ensuring registration u/s.12A and recognition u/s.80G under the Income Tax Act, 1961. The Tribunal highlighted that while the registrations were granted, the Assessing Officer retained the authority to verify compliance with relevant provisions during assessment procedures.

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