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2016 (9) TMI 1031 - ITAT MUMBAIApplication of the trust for registration u/s.12A rejected - obligation on the trustees on applying income / funds of the applicant trust solely for charitable purposes - Held that:- On appraisal of the all mentioned objects we found nowhere commercial in nature. So far as the clause 9 of the Act is concerned it speaks about the discretion of the trustees only to select any object of the trust. The trustees have no discretion to apply the income outside the object which is not within the scope of trust. No doubt this clause speaks about the discretion to use their discretion in connection with the object of the trust. It is to be seen whether in view of the above said objects the application moved by the trust is liable to be rejected or not. This controversy can be looked into at the time of assessment. It is liable to be considered whether the assessee is entitled for the exemption u/s.12A of the Act or not. In brief the allowability of the deduction u/s.11 and 12 of the Act is to be looked into by the Assessing Officer while completing the assessment in the hand of the assessee at the relevant time. The said violation of the trust if any on account of provision u/s.13(1)(b) of the Act are not required to be considered by the authority while granting registration u/s.12A of the Act. In view of the said circumstances we are of the view that the rejection of the application of the assessee is wrong and against the law and facts, therefore, the order passed by the authority in question is ordered to be set aside. We direct the concerned authority to re-examine the matter afresh and to decide the same in view of the observation made above by giving an opportunity of being heard to the assessee in accordance with law. - Decided in favour of assessee
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