Sampark Livelihoods Promotion Trust vs. Commissioner Of Income Tax - (Income Tax Appellate Tribunal) (08 Aug 2023)

For the activities outside India, it is mandatory to obtain necessary approval as per Section 11(1)(c) of the IT Act

MANU/IL/0243/2023

Direct Taxation

The assessee is a trust registered under the Indian Trusts Act, 1882. The assessee filed application in Form 10A along with documents for obtaining registration under Section 12AA of the Income Tax Act, 1961 (IT Act). A provisional registration was granted. Thereafter the assessee filed application in Form 10AB for registration under Section 12AB of the Act. The CIT(Exemptions) [CIT(E)]issued notice and the assessee filed certain details. On verification, it was noticed that the assessee carried out the activities outside India and expended funds on the projects.

The assessee was provided opportunity to provide a copy of the Special Order of the Board for conducting activities outside India. The CIT(E) observed, however, in order to carry out activities outside India, permission is required from the Board as per Section 11(1)(c) of the IT Act. Since the assessee failed to produce the permission from the Board and other documents regarding genuineness of the activities of the trust and compliance in terms of Section 12AB(1)(b)(i & ii) of the Act, the application for registration under Section 12AB was rejected by the CIT(E). Aggrieved, the assessee is in appeal before the Tribunal.

The assessee has been granted provisional registration and the assessee filed application in Form 10AB for regular registration which has been rejected by the CIT(E) stating that, the assessee has not followed the provisions of Section 11(1)(c) and not complied with the requirements of the provisions of the Act as well as failed to prove the genuineness of the activities of the trust. For the activities outside India, it is mandatory to obtain necessary approval as per Section 11(1)(c) of the Act which has not been complied by the assessee.

Permission from the Board is mandatory as per Section 11(1)(c) of IT Act for the above international projects/activities. It is also not clear whether the MAVIM (2017-2018) project is national or international project. The order of the learned CIT(E) is confirmed. The appeal by the assessee is dismissed.

Tags : TRUST REGISTRATION GRANT