Eligible for Approval u/s 80G if 12AA registration is granted and continues: ITAT

Dignity Education Society v/s. Commissioner of Income-tax (Exemption)

(Order pronounced in open court on 9th June 2022)

The assessee runs a society that is engaged in educational activities and filed an application for exemption u/s 80G of the Act in form No. 10G. In order to verify the object and activities of the applicant and to ascertain the fulfillment of conditions mentioned u/s 80G, the applicant was given an opportunity of being heard and notice was issued. JCIT and AO did not grant approval u/s 80G of the Act.

Appeal before CIT(E): The ld. CIT(E) observed that details produced by the society reveal that society is charging sufficient fees from the students and also generating sufficient cash surplus as observed from the audited accounts for the Financial Years 2014-15, 2015-16 & 2016-17. Therefore, the ld. CIT(E) did not grant approval to the society u/s 80G of the Act.

Appeal before ITAT: Aggrieved from the said order of the ld. CIT(E), the assessee preferred an appeal before the tribunal. In the case of Dr. Gyanendra Goel Foundation Vs. Commissioner of Income Tax, after relying on the decision of Hon’ble Gujarat High Court in the case of Hiralal Bhagwati Vs. Commissioner of Income Taxi, in similar circumstance, has held that when the Commissioner of Income Tax has granted registration u/s. 12AA after examining the genuineness of activities of Trust, and the registration granted has not been revoked or cancelled then it is not proper for the CIT to reject the application of Trust for benefit of exemption u/s. 80G by holding that the activities of the Trust were not genuine.

The tribunal thus, decided the assessee is eligible for approval of 80G of the Act since their 12AA registration is granted and continues. Even the assessment proceedings for A. Y. 2016-17 were completed without any adverse observation on the issue and the activities of the trust are in accordance with the condition prescribed. Therefore, following the decision of the Co-ordinate Bench. The order of ld. CIT(E) was set aside and ld. CIT(E) was directed  to grant an approval to the assessee u/s 80G of the Act. Thus, the appeal of the assessee was allowed.

To Read Judgment Download The PDF Given below.