TaxTMI 
TaxTMI 
2023 (2) TMI 1298
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....facts are being extracted from ITA-292-2018. The revenue has come up in appeal against the order dated 09.02.2018 (Annexure A-2) passed by the Income Tax Appellate Tribunal, New Delhi (hereinafter referred to as 'the Tribunal') whereby the appeals filed by the assessee were allowed by setting aside orders passed under Section 12AA and under Section 80G(5)(vi) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act, 1961'). The brief facts of the case are that the respondent-assessee is a trust, registered vide Deed dated 27.03.2015. The trust was started by the settler M/s. Veers Overseas Ltd., a limited company, which, in order to carry out its duties under the Corporate Social Responsibility (CSR), as provided u....
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....parties and perused the material available on record. It is pertinent to note that the reasons (i) and (ii) given by the CIT (exemption) is that the main aim appears to be forming a trust merely for complying to CSR requirements. When a trust is created for the purpose of carrying out CSR activities, the registration under section 12AA of the Income Tax Act, 1961 cannot be denied. Vide notifications dated 27/02/2014 the Ministry of Corporate affairs in the rules framed for the purpose of CSR has implicitly provided for forming the dedicated trust under sub rule 2 to rule 4. It has been stated as under: "(2) The board of a company may decide to undertake it is CSR activities provide by the CSR committee, through the registered trust or a r....
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....ary by the transferring its funds to other society. Even the funds given to another charitable society for the purpose of charity are considered as application of income for the purpose of exemption under Section 11 of the Income Tax Act, 1961. At the time of granting the registration under Section 12AA of the Income Tax Act, 1961, the CIT (exemption) need not go beyond two parameters that the object being charitable in nature and activities being genuine. All other activities are the matters to be taken care of by the Assessing Officer at the time of assessment for granted exemption under section 11 of the Act. Reasons (vi) given by the CIT (exemption) that it also militates against the legal principal that social enterprises cannot be a d....
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....CIT to grant the registration u/s 12AA of the Act and also the approval u/s 80G(5)(vi) of the Act to the assessee." The Tribunal has rightly examined the case of the respondent-assessee for grant of registration under Section 12AA of the Act, 1961 as there were only two parameters which the Commissioner was required to examine for registration of trust:- 1. The object of the trust. 2. The genuineness of the activities of the trust/institution. The Commissioner is not to examine eligibility and activities. All other activities would fall under the domain of the Assessing Officer at the time of the assessment for granting exemption under Section 11 of the Act, 2016. The Commissioner is also not to examine whether the activities of the t....
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....961. Thereafter, the Full Bench of the Allahabad High Court had examined this issue in ITA-37-2017 titled as Commissioner of Income Tax (Exemption) U.P.State Cons and Infra. vs. M/s. Reham Foundation Kandhari Lane Lal Bagh Lucknow, decided on 26.09.2019. In paras No. 29 to 31, the Full Bench observed as under:- "29. In view of the aforesaid discussion, it is clear that the power and jurisdiction of the Appellate Tribunal under Section 254(1) of the Act, 1961 is unfettered thereby enabling the Appellate Tribunal to direct registration of the Trust at its level itself but the same is not open as a matter of course and such power is to be exercised only in circumstances indicated herein above. 30. The said onus on the Appellate Tribunal to....
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.... and such decision is overturned by the income tax Appellate Tribunal. (ii) The power of the Appellate Tribunal are co-extensive with the power of the Commissioner under Section 12 (AA) of the Act, 1961 subject to what has been indicated herein above. However order for registration can be issued only after recording satisfaction with regard to genuineness of activities of the Trust as provided under Section 12 (AA) of the Act, 1961." By applying the ratio of Full Bench judgment to the facts of the present case, application for grant of registration was dismissed by the Commissioner and the Tribunal has recorded its satisfaction as the trust fulfills following two basic conditions for grant of registration under Section 12AA of the Act, 1....