TaxTMI 
TaxTMI 
2025 (7) TMI 972
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....03.2025, rejecting the application filed by the appellant for registration u/s 12AB, being not justified be set aside and the appellant be declared eligible for registration u/s 12A of the IT Act, 1961. 3. The appellant craves leave to add, alter, amend and/or vary any of the above grounds of appeal at any time before the decision of the appeal." 3. The brief facts of the case are that the assessee, TIH Foundation for IOT & IOE was incorporated on 25th August 2020 under section 8 of the Companies Act, 2013, with the primary objective of promoting Technology Research and Development under Central Government grants and mission. The assessee company is set up by the Indian Institute of Technology, Bombay pursuant to the directions from the Ministry of Science and Technology and funded by grant sanctioned under (National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS) scheme) from Central Government. The sanction order from the government is placed at pages 1 to 4 of the paper book relevant sanction order copy for financial assistance of general budget to assessee dt. 24.12.2020). One of the target area/deliverables from the grant sanction under NM-ICPS Missio....
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....act as an Accelerator to organizations in accordance with the policies of the Company and provide the ecosystem for technology development and deployment and delivering technologies or technology solutions for the development of the nation. 5. The Ld.AR argued and filed a paper book containing pages 1 to 109, which is kept on record. The Ld.AR stated that the assessee - trust formed as per section 8 of the Companies Act, 2013 and in collaboration with Indian Institute of Technology, Bombay (IIT, Bombay), Ministry of Science & Technology, Government of India. The said agreement with the formation of the Trust is duly annexed at pages 5 to 227 of the paper book. The Ld. CIT(E) had rejected the said registration on the ground that the assessee has executed foreign expenses for running the trust which is contravening the provisions of section 11 of the Act. The relevant paragraphs 4 to 6 of the impugned order of Ld.CIT(E) are extracted below:- "4. Applicant's reply is neither satisfactory nor conclusive. In its reply, the applicant states that The objects referred in the notice from pt. no 3 (B) are from the objects or ancillary to the attainment of the main objects for....
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.... of the order is extracted below:- "3. So far as the benefit of section 11(1)(a) is concerned, it can be extended only to the extent to which such income is applied to such purposes in India. However, if the income is applied to the purposes outside India, then clause (1) will be applicable and if the permission is granted by the Board either by general or special order then, benefit can be extended. Section 12AA prescribes the procedure for registration. Reading the section, it becomes clear that after the application is made, the officer has to call for documents or information from the Trust to satisfy himself about the genuineness of the activities of the Trust. He can make further enquiry as he may deem necessary. It is only after satisfying himself about the objects of the Trust and the genuineness of its activities that he has to pass an order in writing registering the Trust or institution. And if he is not satisfied, he can reject the same. This section does not refer to the activities in India or outside India. It refers to application of income for charitable or religious purposes in India as also with direction of order of the Board for application of income as....
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....n permits carrying on objects outside India and if any income is applied for such objects, then it cannot be considered as application of income "for objects other than the objects of the charitable trust or institution" falling within the meaning of clause (a). Consequently, the clause (a) would not be attracted. (ii) Clause (b) would be attracted only if any business or profession is carried on and there is violation as mentioned therein. This clause will not be attracted for application of income for permitted objects outside India. (iii) Clause (c) would be attracted when income of trust held for private religious purposes is applied for those purposes, which does not ensure for the benefit of public. The assessee herein is not a trust held for private religious purposes and hence this clause will not apply to the assessee herein. (iv) Clause (d) would be attracted when income of the trust is applied for particular religious community or caste. This clause will also not apply to the assessee herein. (v) Clause (e) would be attracted when any activity being carried out by the trust or institution - (i) is not genuine; or (ii)....
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....haritable purposes in India, i.e., it does not permit exemption of income applied outside India. Hence income, if any, applied for objects outside India cannot be construed to be violation of 'any other law' falling within the meaning of clause (f) of Explanation to sec. 12AB(4) of the Act. 14. The foregoing discussions would show that the application of income of a charitable trust or institution outside India for carrying out its objects will not fall under any of the categories of "specified violation" as mentioned in the Explanation to sec.12AB(4) of the Act. Hence, the decision rendered by Hon'ble Delhi High Court in the case of M.K. Nambyar Saarf Law Charitable Trust v. Union of India [2004] 140 Taxman 616/269 ITR 556 (Delhi) will apply to the provisions of sec.12AB of the Act also, since the provisions of sec.12AB also do not refer to the activities carried in India or outside India. 15. In view of the foregoing discussions, it can be concluded that existence of any object for carrying out any activity outside India will not enable the Ld CIT(E) to deny registration u/s 12AB of the Act. As observed earlier, such kind of application of income out....