TaxTMI 
TaxTMI 
2025 (11) TMI 405
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....under Section 12A / 12AB of the Act erred in rejecting the application filed by the Appellant under section 12A(1)(ac) on the ground that Appellant has not made submission / compliance to notices issued. 3. Considering the facts and circumstances of the case and in law, the Commissioner of Income-Tax, Exemption failed to appreciate the fact that the Appellant has not been provided with reasonable opportunity of being head as mandated by section 12AB(1)(b) of the Act and hence the impugned order is void ab initio and is liable to be quashed / set aside. 4. Considering the facts and circumstances of the case and in law, the Commissioner of Income-Tax, Exemption erred in passing the rejection order on the ground that the object clause of the Appellant allows Appellant to apply funds outside India even when the said application of funds outside India does not fall under any categories of 'specified violation' as mentioned in Explanation to section 12AB(4) of the Act. 5. Considering the facts and circumstances of the case and in law, the Commissioner of Income-Tax, Exemption erred in passing the rejection order without condoning the delay in filing For....
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....trustees should have monitored the income tax matters and should have taken some action against the said employee which is not the case here. In this regard it is relevant to notice that prior to 01.10.2024, the power to condone the delay in filing Form 10AB was vested with CBDT and CBDT has been extending the time limit for making the application from time to time, the last one of which extended the time limit to 30.06.2024. The Finance Act (No.2) of 2024 inserted the following proviso to section 12A(1)(ac)(vi) which reads as under - "Provided that where the application is filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time" 5. The Memorandum explaining the provisions Finance Bill in this regard stated that - A trust or institution desirous of seeking registration under section 12AB is inter alia required to apply within timelines specified in clause (ac) of sub-section (1) of section 12A 2. It has been noted that at times trust....
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....an 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 Mission, Ministry of Science & Technology is international collaboration for technology research & development to be used in India for various sectors (at present, mainly in defence & agriculture sector). This responsibility was placed on the assessee vide tripartite agreement dt. 07.12.2020 between the Hon. President of India, acting through Mission Director, Mission office, NM-ICPS, New Delhi, Indian Institute of Technology, Bombay (Host Institute) and TIH Foundation for IOT & IOE (Assessee), (Copy of agreement is placed at APB pages 05 to 27). The assessee enjoyed registration u/s 12AB of the Act from A.Ys. 2021-22 to A.Y. 2025-26 (copy of order of registration in form 10AD is place....
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..... CIT(E) had rejected the said registration on the ground that the assessee has executed foreign expenses for running the thot which is contravening the provisions of section 11 of the Act. The relevant paragraphs 4 to 6 of the impugned order of Lad CITTE) 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. nn 3 (B) are from the objects or ancillary to the attainment of the mate objects for which company is established. This contention does not make moch difference to the fact that the objects are in violation of section 11 of the Act because as per the MOA these objects are categorised as "Objects incidental or ancillary to the attainment of the main objects for which the Company is established (i.e. Main object)". Thus, even though these are not main objects, these are very much integral to attainment of main objects of the MOA. Such objects leave room for any potential future endeavour may be undertaken by the assessee trust which would require expenditure outside India Further, in point no. 4 of the MOA, the applicant clearly expresses that the objects ....
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....ctivities 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 aforesaid outside India. Reading the order dated 24-2-2004, it is very clear that there is non-application of mind. It was necessary for the Commissioner to examine the purpose for satisfying himself that the activities are genuine. It was open for him to make necessary enquiries in this behalf and to pass an order as per the procedure laid down under section 12AA of the said Act. So far as income which is applied outside India is concerned, is not a relevant criteria for rejecting the application. In absence of order under section 11(1)(a)(c), one cannot seek benefit for application of income for charitable or religious purposes, outside India Theref....
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....s, 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) is not being carried out in accordance with all or any of the conditions subject to which it was registered. This clause would be attracted when the activities of the charitable trust or institution is not genuine or in violation of any of the conditions subject to which the registration u/s 12AB was granted. In the instant case, the Ld CIT(E) has stated the activities claimed to have been carried on is not supported by the expenses incurred. According to Ld A.R, the above said observations are against the facts available on record. Hence the above said observations of Ld CIT(E) is dealt with separately infra. (vi) Clause (1) would be attracted when there....
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....ion 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 outside India (unless it is permitted by the CBDT) will not be exempted u/s 11 of the Act." 8. The Ld. DR argued and fully relied on the order of the Ld CIT(E). 9. We have carefully considered the rival submissions and perused the material available on record. It is an undisputed fact that the assessee is a not-for-profit company incorporated under Section 8 of the Companies Act, 2013, established pursuant to the directions of the Ministry of Science and Technology, Government of India, and hosted by IIT Bombay. The assessee has been granted registration under Section 12AB of the Act for earlier assessment years, ie., A.Υ. 2021-22 το Α.Υ. 2025-26, and....