2021 (7) TMI 1129

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....)(b)(i) of the Income Tax Act, 1961 [for short 'the Act']. 2. Brief facts of the case are that the appellant Trust carrying on charitable activities applied for registration u/s 12AA of the Act, in Form 10A on 29.06.2016 before the CIT(E). The Ld. CIT(E) rejected the application and denied registration inter alia on the grounds that the applicant Trust has failed to establish that it has been carrying out charitable act as per the stated objects and that it had received huge donation amounting to Rs. 1.57 crore from M/s Mata Narayan Kaur Charitable Trust which appears to be a transfer of funds from a non- functional Trust. The appellant challenged the order passed by the Ld. CIT(E) before the ITAT. The coordinate Bench vide order dated 2....

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....d 9 of the order, dated 26.07.2017 and, thus, the specific directions of the Hon'ble ITAT, Chandigarh Bench, Chandigarh have not been followed, while rejecting the application u/s 12AA of the Income Tax Act. 4. That the order as passed by the Ld. CIT, (Exemptions) is against the facts and circumstances of the case. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal 4. Before us, the Ld. Counsel for the appellant submitted that the Ld. CIT(E) has passed the impugned order without taking into consideration the directions of the Tribunal. In the first round of appeal, the Tribunal vide order dated 26 .07.2017 partly allowed the appeal of the appellant and set aside the findings o....

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..... CIT(E) has not given any adverse remarks in respect of activities carried out by the assessee Trust in its order dated 12. 03.2020, which was the only issue for determination as per the order of the ITAT. To substantiate his contention, the Ld. counsel relied upon the order passed by the Hyderabad Bench of the Tribunal in the case of state bank of Hyderabad vs. DCIT ITA No. 449/HYD/ 2015, in which the Tribunal has held that the AO cannot travel beyond the limited directions of the ITAT. The Ld. counsel further submitted that as per the settled law the application for registration under section 12AA cannot be rejected without pointing out defect in the activities of a charitable Trust or institution. To substantiate his contention, the lea....

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....cting the application of the Trust for registration under section 12 AA of the Act. The coordinate Bench after hearing both the parties partly allowed the appeal and restored the issue regarding charitable activities of the Trust to the file of the Ld. CIT(E) holding as under: - "15. ....... we find that the Ld. Counsel for the assessee has demonstrated before us that it had filed adequate replies before the Ld. CIT (exemptions) demonstrating that it had carried out charitable activities in the impugned year which was the first year of coming into existence since it was formed only on 23.12.2015. Further we f ind that the assessee had adduced evidence of having carried out charitable activities thereafter also. Moreover, even befor....

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....of the Ld. CIT (Exemptions) in holding that the assessee trust for the above reason was not entitled to registration u/s 12AA of the Act. The fact remains and which are not disputed by the Ld. CIT (exemptions), are that the assessee trust had received donation of Rs. 1.57 crore from M/s Mata Narayan Kaur Charitable trust. Whether the said donation was to preclude dissolution of the donor trust or that it was made from accumulated funds which had not been utilized in the specified time frame, have no effect nor do they affect the genuineness of the assessee trust. Whatever may have been done by the donor trust, may have an impact on the genuineness of the donor trust and there is no reason in holding the donee trust to be ingenuine ....

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....ies is not in doubt, the CIT has no jurisdiction to refuse registration u/s 12AA of the Act on any irrelevant ground. 10. As pointed out by the Ld. counsel, in the present case, after examining the issue as per the order of the ITAT, the Ld. CIT(E) has not recorded any adverse observations in the impugned order in respect of the charitable activities carried out by the appellant Trust. So far as the Tax liability in respect of the corpus donation is concerned the same was not the issue for determination before the Ld. CIT(E) as the same has already been dealt with by the coordinate Bench in the first round of appeal and no direction was issued to look into the said issue. Hence, we find merit in the contention of the Ld. counsel that ....