2020 (9) TMI 241

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....anies Act, 1956. Registration u/s.12AA of the Act was granted on 15-02-2019. The assessee e-filed application in Form No.10G for grant of recognition u/s.80G of the Act on 20-02-2019. The ld. CIT (Exemption) required the assessee to furnish/upload certain information/clarifications for the purpose of verifying the genuineness of its activities carried out and utilization/application of proceeds towards the avowed charitable objects of the company. The assessee furnished certain information. The ld. CIT(E) found that the assessee did not submit any proof in respect of activities carried out. From the Profit and loss account for the year ending 31-03-2018, the ld. CIT(E) found that the assessee incurred Nil expenditure on objects of the....

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....etc. of the Act. Clause (vi) of section 80G(5) provides that : 'in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commissioner in accordance with the rules made in this behalf'. Thus, it is essential that the fund or institution must be first registered u/s 12AA etc. of the Act and then, in addition, should have been registered in terms of section 80G(5)(vi) of the Act so as to confer benefit of deduction u/s 80G to the persons making donations. The relevant rule referred to in sub-section (vi) of section 80G(5) is rule 11AA of the Income-tax Rules, 1962. This rule, in turn, embodies `Requirements for approval of an institution of fund under section 80G'. Sub-ru....

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....on grant of registration u/s 12AA etc., the registration u/s 80G(5) should automatically follow, which in our considered opinion is contrary to the directive of the provisions. It is quite clear that only after the institution or fund has been registered u/s 12AA etc. that, on an application made by it, the exercise of examination of the satisfaction of conditions of section 80G read with rule 11AA gets triggered. 4. Adverting to the facts of the instant case, it is noticed that the assessee was incorporated on 10-03-2008. From the Profit and loss account of the assessee for the year ending 31-03-2018, the ld. CIT(E) found that no activities were carried out. We gave also gone through such P&L account and find that there is Nil expenditu....