TaxTMI 
TaxTMI 
2024 (9) TMI 1124
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....et the objections as raised in order of rejection. 2. That the Ld. CIT Exemptions Chandigarh has erred on facts and laws while rejecting the application filed in Form No. 10AB of the Act Dt. 30.09.2023, seeking the registration under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, vide order in Form No. 10AD of the Act Dt. 22.03.2024 without appreciating the replies and documentary evidence filed to prove the genuineness of activities filed during the course of proceedings. 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed of." 3. Briefly, the facts of the case are that the appellant assessee filed an application Form No. 10AB on 30.09.2023 seeking registration under subclause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961. The ld. CIT(Exemptions) has issued a questionnaire online through e-proceedings on e-filing portal requesting the appellant to furnish certain details and documents as per page no. 3 & 4 of the impugned order and the CIT(E) after going through reply of the assessee, rejected its application for registration ....
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....1961 though the society was created on 17.02.2021. Copy of the memorandum of Association and Rules & Regulation have been enclosed at pages 14 to 29 of the paper book. The assessee trust was granted provisional registration upto 31.03.2024 as per copy of the provisional registration placed at pages 1 to 3 of the paper book. The Ld. AR contended that the Ld. CIT Exemptions Chandigarh was not justified in rejecting the application filed in Form No. 10AB of the Act Dt. 30.09.2023, seeking the registration under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, vide order in Form No. 10AB of the Act Dt. 22.03.2024 without appreciating the replies and documentary evidence filed to prove the genuineness of activities filed during the course of proceedings. In support of its contentions, he filed a brief synopsis which reads as under: 4. That the assessee society had moved an application for registration and then a detailed questionnaire was issued to the assessee by the CIT (Exemption) and which was replied to and the CIT (Exemption) has not granted the registration by mentioning as under: a. It has been stated that the activities as per the ....
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.... had created lot of panic and many people had died, for which, we had distributed pamphlets and the payment for the said pamphlets were made out of the amount received from Harry Auto Fuel on 01.06.2023 and 12.06.2023 and then payment was made to Madhva Printers. All such entries are through banking channel and cannot be doubted at all. 14. Further activities as per the photographs that number of villagers was involved in carrying out such charitable activities besides providing milk to the infants. These evidences have not been doubted at all and the CIT (E) has only in a casual manner stated that these activities are not for charitable activities. 15. This contention of the CIT (E) is not correct since when it has not been doubted that the assessee is carrying out charitable activities and only on account of quantum of activities or the activities have not been carried out on large scale and therefore, the registration u/s 12A is not to be granted is not a correct law. Further, please refer to Section 12AB(1)(b)(i) wherein, it has been stated as under: [Procedure for fresh registration.- 12AB. (1) The Principal Commissioner or Commissioner, on ....
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....ting granting it approval for a period of five years; (ii) where the application is made under clause (/'/') or clause (Hi) of the said proviso,- (a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about- (A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (/') to (v); (b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause(a), (A) pass an order in writing granting it approval for a period of five years; or (B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its approval after affording it a reasonable opportunity of being heard; 17. Copy of the judgment of Hon'ble Rajasthan High Court is placed at pages 67 to 68 of the paper book. 18. Further, reliance is being placed on the judgment of Hon'ble Supreme Court in the case of Water and Land Management Training a Research Institute as reported in 461 I....
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....ire confidence, while perusing the financial statements of the applicant. It was also noticed that the applicant has debited an expense of Rs. 6,81,214/- to Printing & Poster Expenses during Covid time and other expenditure relating to Bank Expenses amounted to Rs. 88.50/-. The CIT(E) has discussed that the bank statement of applicant was also examined to see if expenses related to any charitable activity. 9. The Ld. CIT(E) observed that the amounts come from Harry Auto Fuels and same was paid to Madhwa Printers. In 2021-22, on 20.01.2022, Rs. 4,29,976.40 come from Harry Auto Fuel and same day, Rs. 5 lacs transferred to Madhwa Printers. On 31.03.2022, Harry Auto Fuel was paid back Rs 5 lacs. Again, it was found that deposits of Rs, 3 lacs and Rs. 2 lacs were received from Harry Auto Fuels on 01.06.2023 and 12.06.2023 respectively, which were transferred to Madhwa Printers on the same day. Thus, It is amply clear that the applicant has not incurred any expense on actual charitable activity as mentioned in its MoA. In view of that matter, the applicant's claim of registration under section 12AB is liable to be rejected on grounds of its failure to prove genuineness of its acti....
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.... the Ld. PCIT. In the peculiar facts presented before the Ld. CIT(E) as discernable from the record, the case law relied on by the ld. AR are distinguishable in the instant case. Hon'ble Apex Court in the case of Lai Chand Bhagat Ambika Ram vs. CIT reported at 37 ITR 288, Umarcharan Shaw & Brothers reported at 37 ITR 271; Omar Salay Mohammad Sait vs. CIT reported at 37 ITR 151and the Water and Land Management Training a Research Institute as reported in 461 ITR 1 (SC) (2024) are distinguishable to the peculiar facts of the present case available on record before the PCIT(E). 13. As per mandate, the section 12AA requires the Commissioner to be so satisfied in order to ensure that the object of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12. In other words, if it appears that the objects of the trust and its activities are not genuine, that is to say not charitable, the Commissioner is entitled to refuse and in fact, bound to refuse such registration. 14. In the present case, the appellant Trust has been an ongoing entity, actually carrying its activities, therefore,....