ITAT Directs CIT(E) to Grant Registration to Trust Under Section 12AB

The assessee, C. J. Mangaliwala Dharmarth Trust, filed an application for the renewal of registration under section 12A(1)(ac)(iii) of the Income Tax Act. However, the same was rejected by the CIT(Exemptions), citing that the activities of the assessee trust are not genuine and in alignment with the main objectives of the society.

The CIT(E) observed that the assessee society has earned profit on the sale of land, made cash deposits, advanced a loan of Rs 21 lakh in 2021, and also debited some expenses in its income expenditure account, which could be substantiated by the trust. The Trust filed an appeal before the Income Tax Appellate Tribunal (ITAT), Delhi.

The Tribunal disagreed with these objections and highlighted that the trust had already been granted registration under Section 12AA, and the issues raised by the CIT(E) must be raised during the assessment proceedings and not while granting registration under Section 12AB of the Act. Therefore, the Tribunal directed the CIT(E) to grant registration to the assessee trust.