Trust formed by Co. for complying CSR requirement is entitled for registration as charitable trust

[Sunil MALOO]

Trust formed by Co. for complying CSR requirement is entitled for registration as charitable trust

March 20, 2018[2018] 91 taxmann.com 197 (Delhi - Trib.)

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IT: Merely because assessee-trust was formed by a company for complying corporate social responsibility requirement, it could not be denied registration under section 12AA, unless genuineness of activities of assessee-trust or its charitable object was doubted

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[2018] 91 taxmann.com 197 (Delhi - Trib.)

IN THE ITAT DELHI BENCH 'E'

Nanak Chand Jain Charitable Trust

v.

Commissioner of Income-tax (Exemptions), Chandigarh*

N.K. SAINI, ACCOUNTANT MEMBER 
AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER

IT APPEAL NOS. 6527 & 6528 (DELHI) OF 2016
[ASSESSMENT YEAR 2016-17]

FEBRUARY  9, 2018 

Section 12AA, read with sections 11 and 80G, of the Income-tax Act, 1961 - Charitable or religious trust - Registration procedure (Illustrations) - Assessment year 2016-17 - Whether at time of granting registration under section 12AA Commissioner (Exemption) need not go beyond two parameters that object being charitable in nature and activities being genuine and such activities are matters to be taken care of by Assessing Officer at time of assessment for granting exemption under section 11 - Held, yes - Assessee-trust was formed for complying Corporate Social Responsibility (CSR) requirement under Companies Act - Objects of assessee-trust were in nature of eradicating hunger and poverty, promotion of education etc. - Apart from this, trust might carry on other activities as prescribed by Government - Whether where Commissioner (Exemption) had not doubted genuineness of activities of assessee-trust nor doubted its charitable object, he was not justified in denying registration under section 12AA along with approval under section 80G(5)(vi) - Held, yes - Whether issue as to whether Corporate Social Responsibility (CSR) expenditure is allowable expenditure under section 37(1) or not, is relevant only for taxability of company incurring such expenditure; it was not relevant for granting registration to assessee-trust - Held, yes [Paras 9 & 10] [In favour of assessee]

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Sunil MALOO | Partner

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