2020 (1) TMI 116

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....e appellant in this regard. 2. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing." 2. The assessee trust was constituted vide Trust Deed dated 17.10.2017. The assessee applied for grant of registration under section 12AA of the IT Act as well as for grant of approval under section 80G(5)(vi) of the IT Act vide two separate applications in the Form 10A and 10G respectively both dated 15th February, 2018. The ld. CIT (Exemptions) granted registration under section 12AA(1)(b) vide order dated 24.08.2018, however, the approval under section 80G(5)(vi) was denied on the ground that no significant activity has been started by the assessee trust as per the objects. 3. Before us, the ld. Counsel for the assessee has submitted that the ld. CIT (Exemptions) has not disputed the charitable nature of objects of the Trust, even by considering the objects the registration under section 12AA(1)(b) was granted to the assessee. Since the assessee trust was yet to commence the activity, therefore, the approval under section 80G(5) was denied. The ld. Counsel has submitted that when the ld. CIT (Exemptions) has not found any violation....

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....e Act. The ld. D/R has also relied upon the decision of Hon'ble Delhi High Court in case of Kirti Chand Tarawati Ch. Trust v. DIT [1999] 105 Taxman 686 (Delhi) and submitted that the Hon'ble High Court has upheld the order of refusing the approval under section 80G when the activities of the Trust/Institution were not carried out as per the objects though registration under section 12AA was granted to the said Institution. He has supported the impugned order of the ld. CIT (Exemptions). 5. We have considered the rival submissions as well as the relevant material on record. The ld. CIT (E) has not disputed the objects of the assessee trust being charitable in nature. These objects have been reproduced by the ld. CIT (E) in the impugned order and based on these objects, the registration under section 12AA was granted vide even date order by the ld. CIT (Exemptions). The only objection on which the approval under section 80G(5) was denied has been discussed in para 4 & 5 of the impugned order as under :- "4. In light of above objects, the activities commenced by the trust were examined. Therefore vide questionnaire letter No. 8527 dated 16/22.02.2018 applicant was ....

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....e objects, then the registration granted under section 12AA would not ipso facto vest a right for approval under section 80G(5). In the case in hand, the ld. CIT (E) has not found that the activities carried out by the assessee trust are not as per the objects but it was noticed that no significant activity has been started by the assessee trust. Even otherwise, as per the statement made at bar by the ld. Counsel that the assessee trust has already started its activity, then the said objection of the ld. CIT (E) is also complied with by the assessee. As regards the requirement of the order granting registration under section 12AA to be annexed with the application for approval under section 80G(5) when the assessee has applied on the same date and the registration was granted by the ld. CIT (E) under section 12AA at the time of refusal of the approval under section 80G, then the said condition as provided under rule 11AA stands satisfied as the order of granting approval under section 12AA was already with the ld. CIT (E) at the time of passing the impugned order. The purpose and requirement of accompanying the order granting registration under section 12AA is to make available suc....

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....dertaken much activity. At the inception of the institution, one cannot expect serious activities, since it needs funds and to obtain funds, the trust needs approval u/s 80G of the Act. Thus, the activities are interlinked with obtaining approval. Hence, mere fact that the assessee could not undertake much activity within the short span of 3 months, the Commissioner (Exemptions) should not have refused the claim of approval u/s 80G(5) of the Act. Under the peculiar circumstances, we direct the Ld. Commissioner to consider the issue pragmatically and grant approval u/s 80G(5) of the Act, if all other conditions are fulfilled." Thus it was held that merely because the assessee could not undertake much activity within the short span of time, the ld. CIT (E) should not have refused the claim of approval under section 80G(5) of the Act. The Coordinate Bench of this Tribunal in the case of Keshar Devi Godara Samajik Kalyan Sansthan Singor (supra) has also considered the issue of denial of approval under section 80G(5) in para 3.2 as under :- '3.2. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below....