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2014 (12) TMI 1334 - ITAT MUMBAIRejection of application of registration of trust - as there is no winding up clause hence “the application cannot be said to have constituted a valid public charitable trust” - Held that:-Admittedly, as per the provisions of section 12AA(1)(b) of the Act, the authority concern is expected to satisfy himself about the objects of the trust of institution and the genuineness of its activities, but at the same time, such satisfaction is objective in nature. DIT(E) while rejecting the application of the assessee has nowhere mentioned that he was not satisfied with the objects of the trust or genuineness of its activities. DIT(E) has merely perused the audited accounts of the assessee and receipt of donation of ₹ 6 lakh out of which ₹ 3,50,000/- were incurred for educational activities including expenses on printing and stationary, salary, uniform expenses and welfare activities. So far as, scope of powers of the ld. Commissioner/DIT(E) for the purposes of section 12AA of the Act are concerned, the Authority have to satisfy about the genuineness of its activities of the trust or institution. The objects of the trust are available at pages 11 onwards of the paper book (internal pages 5 onwards of the trust deed). So long, the trust has the objects of charitable nature, in our view, the registration should not be denied. So far as, application of funds and as to whether the assessee can claim benefit of exemption in terms of section 11 and 12 are concerned, these has to be examined by the Assessing Officer at the stage when situation so arises. The assessee vide letter dated 21/11/212 clarified that for winding up of charitable trust section 55 of the Bombay Public Trust Act, 1950 will come into play. The totality of facts clearly indicates that it is a fit case where registration should have been granted by the ld DIT(E). However, we are making it clear that, if at any stage, the assessee trust is found violating the objects of charity or misusing the funds for non charitable purposes/commercial purposes, the Department shall be at liberty to take appropriate action in accordance with law - decided in favour of assessee.
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