Tribunal grants registration to assessee for charitable activities, emphasizes need for blood bank lab. The Tribunal allowed the appeals of the assessee, directing the CIT(E) to grant registration under section 12A based on the commencement of charitable ...
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Tribunal grants registration to assessee for charitable activities, emphasizes need for blood bank lab.
The Tribunal allowed the appeals of the assessee, directing the CIT(E) to grant registration under section 12A based on the commencement of charitable activities from a specified date. The Tribunal emphasized the importance of having a laboratory for the effective operation of a blood bank, acknowledging the charitable nature of such activities. The matter was remitted back to the CIT(E) for re-examination in light of the commencement of charitable activities by the assessee society.
Issues: - Rejection of application under Form 10G for exemption u/s 80G of the Act - Denial of registration u/s 12A by the Ld.CIT(E) - Dispute regarding charitable activities carried out by the assessee society - Grant of registration u/s 12A based on the commencement of charitable activities
Analysis:
1. The appeals were filed against the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], Hyderabad regarding the rejection of the application under Form 10G for exemption u/s 80G of the Act. The Ld.CIT(E) dismissed the appeal citing no charitable activity by the assessee for the grant of approval u/s 80G and also rejected the application for registration u/s 12A, which is mandatory for granting approval u/s 80G.
2. The assessee raised various grounds in the appeal before the Tribunal, asserting that they are indeed carrying out charitable activities as per the Trust's objects. They argued that the Ld.CIT(E)'s conclusions were erroneous and not based on the facts and evidence presented. The Tribunal noted the contentions and arguments put forth by both parties.
3. The main contention revolved around the commencement of charitable activities, specifically running a blood bank. The revenue argued that there was no evidence of charitable activities being carried out by the assessee society as per the application, despite the license being granted later. The Tribunal acknowledged that running a blood bank is charitable but emphasized the necessity of a laboratory for its operation.
4. The Tribunal observed that the assessee had completed the construction of the blood bank but faced delays in obtaining the necessary license due to the absence of a laboratory. The assessee claimed to have started charitable activities post obtaining the license. The Tribunal concluded that without a laboratory, it would be challenging to run a blood bank effectively. Consequently, the matter was remitted back to the CIT(E) to re-examine and grant 12A registration based on the commencement of charitable activities from a specific date.
5. Ultimately, the Tribunal allowed the appeals of the assessee for statistical purposes, directing the CIT(E) to grant registration u/s 12A based on the commencement of charitable activities from a specified date. The order was pronounced in open court on 16th February 2023.
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