The Tribunal ruled that the genuineness of a Trust's activities must be assessed for registration under the Income Tax Act, not the nature of receipts, emphasizing fair evaluation of evidence.

ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Ld.Commissioner of Income Tax (Exemptions)-Patna [hereinafter referred to as the “Ld. CIT (Exemption)”] passed in respect of registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2023-24 dated 26.05.2023.

2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. That the Ld. CIT(Exemptions) has erred in law and on facts by not following the procedure for registration laid out in section 12AB(1)(b) of the Income Tax Act, 1961 , wherein it is clearly specified that he has to see the genuineness of the activities as well as compliance of such requirements of any other law to satisfy himself for passing an order whereas in the instant case the CIT(Exemptions) has no where objected or raised suspicion with respect to the genuineness of the activities of the trust and the compliance of any other law. As such, the rejection made is bad in law.

2. That the Ld. CIT(Exemptions) has erred on fact by rejecting the application on the basis that the assessee failed to prove the genuineness of its activities by overlooking the fact that the assessee has furnished the photographic evidences which are in line with the objective of the trust mentioned in the trust deed as well as documentary evidence with respect to expenditure were also furnished. Therefore, rejection of registration u/s 12A(1)(ac) (iii) of the Income Tax Act, 1961 is not correct and the registration should be granted.

3. That the Ld. CIT(Exemptions) has erred on facts to note that the assessee trust is a religious trust in whose hand anonymous donations are not taxable u/s 115BBC of the Income Tax Act, 1961 , thereby automatically leading to the acceptance towards the nature of receipts in the hands of the assessee trust which are actually collected from masses of people and therefore, the rejection made on this reason is not valid.

4. That the Ld. CIT(Exemptions) has erred on facts by falsely alleging the appellant that it has provided the details by making a manipulative exercise without appreciating the fact that the appellant has provided the information as per the working of the trust true and fair and as such, above allegation made is completely baseless.

5. That the Ld. CIT(Exemptions) has erred in law by cancelling the provisional registration granted u/s 12A(1)(ac)(vi) of the Income Tax Act, 1961 without following the procedure laid out in section 12AB(4) of the Income Tax Act, 1961 leading to abuse of power vested in the hands of CIT(Exemptions) and the same should not be made.

6. That the assessee craves leave to add / alter any of the grounds of appeal on or before the date of hearing.”

3. Brief facts of the case are that an application in Form No. 10AB was filed on 23.11.2022 by the assessee, Faridi Foundation, for grant of regular registration under sub clause (iii) of clause (ac) of sub-section (1) of section 12A read with section 12AB(1)(b) of the Act. The applicant is a Trust. The address of the Trust is Waliganj, Arrah. The Ld. CIT (Exemption) issued a letter dated 20.12.2022 requiring the assessee to submit the documents related to notes on activities undertaken by the applicant during the last three years, annual accounts of the applicant for the last three years, evidences in support of the nature/the quantum of receipts received during the last three years, copies of statements of bank accounts for the last three years and the location details etc. On examination of the submission filed by the assessee on 17.01.2023 and 16.05.2023, another letter dated 18.05.2023 was issued calling for the explanation with regard to the proposed rejection of the application for registration of the Trust. The relevant extract from the order of the