CIT(E) to inform assessee as to what other approvals are required before rejecting Sec. 12AA application

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CIT(E) to inform assessee as to what other approvals are required before rejecting Sec. 12AA application


Where assessee-trust engaged in imparting education is having approval from the Central Board of Secondary Education and it is also complying with the requirement of Right to Education Act, but Commissioner (E) observed that the assessee has not obtained any permission/approvals/affiliation for implementing its objects under various acts, since neither any enquiry was made in this regard nor any show cause notice was given on the applicability of these laws/permission/sanction nor any opportunity of hearing was given to the assessee, and the assessee was having necessary approval/affiliation from respective authorities as required by CIT(E), asssessee is entitled to registration under section 12AA and the action of the CIT(A)(EXEP) can not be countenanced and is not in accordance with law
Once the affiliating Central Board of Secondary Education, which is a specialized and designated authority for the purpose of ensuring the quality, standard of education and is further bestowed with the responsibility to ensure safety, hygiene, potable water, health, building norm etc. had granted the affiliation to the assessee then the Commissioner exemption cannot sit in appeal against the affiliation granted to the assessee by the board . The expert body in the field of education is affiliating board and once affiliation is granted then the authorities and approval/permission, which had already been examined by the board should not be a subject matter of fresh examination by the Commissioner exemption. The purpose of grant of registration is to ensure that the assessee is primarily into charitable activities as defined under section 2(15) of the Act and for those purposes, Commissioner exemption should make enquiries only. The Commissioner exemption should not use this opportunity to extend its authority beyond Income-tax Act i.e. in the sphere of the other authorities under different laws or sitting in judgment against permission/approval given under different laws, as it is for the other authorities to examine whether the assessee is subjected to provision of law and is required to comply the relevant provision of law. Therefore before embarking upon any enquiry by the Commissioner exemption, it is sine qua non(essential) to inform the assessee as to which are the various laws under which the assessee should have the approval/permission before seeking the registration.
Doctor Madan Lal Atri Charitable Trust
[2021] 127 636 (Agra – Trib.)

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