Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 1365 - ITAT CHANDIGARHRegistration u/s 12AA rejected - scope of the powers of the Ld. CIT for granting or refusing registration u/s 12AA - Held that:- While granting or refusing registration to a Trust the Ld. CIT is only required to examine whether the objects of the Trust were for charitable purpose and whether the activities of the Trust were genuine. The finding of the Ld. CIT that the accounts of the assesse were not correctly maintained does not effect the genuineness of the activities of the Trust. Genuineness of the activities of the Trust has to be seen keeping in mind the objects of the Trust. The Ld. CIT has to satisfy himself about the fact that the activities are genuine and in consonance with the objects of the Trust. The enquiry regarding genuineness of the activities cannot be stretched beyond this. We therefore find that this ground for rejecting registration u/s 12AA is not correct. However AO is not precluded from examining this issue during the course of assessment proceedings while examining the assessees claim for benefit u/s 11 and 12 of the Income Tax Act, 1961, in accordance with law. CIT contention that the assessee had been earning huge profits year after year which showed that it was not running for the purpose of charity does not justify the refusal of registration as profit earning per se has no reflection on the genuineness of the activities of the Trust. In fact it is not the earning of surplus which is relevant but its utilization for non charitable purposes which effects the genuineness of the activities of the Trust. The Supreme Court in Queens Educational Society Vs. CIT [2015 (3) TMI 619 - SUPREME COURT ] has stated that mere surplus does not mean that the institution is existing for making profit. The predominant object test must be applied. - Decided in favour of assessee.
|