NISPERA FOUNDATION,MUMBAI V. COMMISSIONER OF INCOME TAX (EXEMPTION) , MUMBAI

ITA 6305/MUM/2024

AI Insights

The case involves Nispera Foundation, a Trust, which appealed against the order of the Commissioner of Income Tax (Exemptions) rejecting its application for registration under section 12AB of the Income Tax Act, 1961. The initial rejection was based on the grounds that some objects of the Trust, as per its original Memorandum of Association, indicated an intention to apply/receive funds outside India, which could violate the provisions of section 11 of the Act. However, during the appeal, the Trust presented a revised Memorandum of Association, which was not considered by the CIT(E) at the time of the initial decision. The Tribunal decided to set aside the CIT(E)'s order and remand the matter for a fresh examination in light of the revised documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470944 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH C. KANOJIYA
• Assessee Lawyers: K. GOPAL
• Keywords: Set aside
• Section: 11; 13

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.6305/MUM/2024 Nispera Foundation, 9-12, 7/18, Dalamal Court, Worli Sea Face, Worli, Mumbai – 400018 PAN : AAHCN9720A ............... Appellant v/s Commissioner of Income Tax (Exemp.), Room No.601, 6th Floor, Cumballa Hill, MTNL TE Building, Peddar Road, Dr. Gopalrao Deshmukh Marg, Mumbai - 400026 ……………… Respondent Assessee by : Shri K. Gopal, Adv. Ms. Neha Paranjpe Revenue by : Shri Kailash C. Kanojiya, CIT-DR Date of Hearing – 28/01/2025 Date of Order - 30/01/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 13/11/2024 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [“learned CIT(E)”], rejecting the application filed by the assessee seeking registration under section 12AB of the Income Tax Act, 1961 (“the Act”). 2. In this appeal, the assessee has raised the following grounds: – ITA No.6305-Mum-2024 2 “1. The Commissioner of Income Tax (Exemption) [hereinafter referred to as the CITE)] erred in passing an order dated 13.11.2024 and thereby rejecting the application dated 13.05.2024 in Form 10AB seeking registration under section 12AB of the Act without appreciating the facts and circumstances of the case and the submission of the Appellant. The said order passed by CIT(E) is not at all justified and the same may be set aside. 2. The CIT(E) failed to appreciate that the objectives of the Appellant company are to carry out the charitable activities and the same do not violate the provisions of section 11 of the Act. Hence, the CIT(E) is not justified in rejecting the application seeking registration under section 12AB of the Act. The order dated 13.11.2024 passed by the CIT(E) is not justified and the same may be set aside.” 3. We have considered the submissions for both sides and perused the material available on record. The brief facts of the case are that the assessee is a Trust and was granted provisional registration under section 12A(1)(ac)(vi) of the Act vide order dated 06.01.2022 passed in Form No.10AC. Subsequently, the assessee filed an application in Form No.10AB under section 12A(1)(ac)(iii) seeking registration under section 12AB of the Act. On verification of the application, the learned CIT(E) found that the application was not complete and all the documents required to be accompanied were not furnished. Accordingly, notice was issued to the assessee to furnish the complete set of documents mentioned in Rule 17A(2) of the Income Tax Rules, 1962. In response, the assessee filed its submission. After going through the same, the learned CIT(E) from the Trust Deed/Memorandum of Association noticed that some of the objects of the Trust are in violation of the provisions of section 11 of the Act as the Trust intends to apply/receive funds outside India. Accordingly, a show cause notice was issued to the assessee and other additional information was called for. In response, the assessee filed a letter certified by the Director of the Trust claiming that the Trust has never applied funds outside India nor does it have ITA No.6305-Mum-2024 3 any intention to do so in future. The learned CIT(E), vide impugned order, after noting the objects of the Trust concluded that the same conveys the intention of the Trust to utilise funds outside India, thereby leaving the possibility for future endeavours, which may involve expenditure outside the country. The learned CIT(E) further held that the registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied with the objects of the Trust or institution, the genuineness of the activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. Accordingly, the learned CIT(E) rejected the application filed by the assessee for seeking registration under section 12AB of the Act. 4. During the hearing, the learned Authorized Representative (“learned AR”) reiterated the submissions made before the learned CIT(E) and submitted that the organization has never applied funds outside India nor there is any intention to do so in future. The learned AR further submitted that the Trust by way of a special resolution passed in the annual/extraordinary general meeting has modified the provisions of its Memorandum of Association and any reference to utilization of funds outside India in the object of the Trust has been deleted. In this regard, reference was made to the certificate for alteration of the Memorandum of Association issued by the Ministry of Corporate Affairs, Government of India under section 13 of the Companies Act, 2013 and the revised Memorandum of Association, which forms part of the paper book from pages 83-89. ITA No.6305-Mum-2024 4 5. It is evident from the record that the aforesaid revised Memorandum of Association was executed on 20.12.2024, i.e., after the passing of the impugned order, and thus was not under consideration before the learned CIT(E). Therefore, having considered the facts and circumstances of the present case, we deem it appropriate to restore the application for seeking registration under section 12AB of the Act to the file of the learned CIT(E) for de novo adjudication after consideration of the revised Memorandum of Association and revised objects as executed by the assessee. With the above directions, the impugned order is set aside and the grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 30/01/2025 Sd/- B.R. BASKARAN ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 30/01/2025 Prabhat Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "