TMI Blog2014 (1) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... ot. Relying upon CIT-1 vs. Kutchi Dasa Oswal Moto Pariwar Ambama Trust [2012 (12) TMI 876 - GUJARAT HIGH COURT] - the conclusion of the DIT(E) to the effect that since the assessee has not commenced its activities, registration under section 12A will not be granted is not the correct view - So far as the conclusion of the DIT(E) that the assessee is having mixed objects hence, registration cannot be granted - such conclusion is also not correct as there is no such restriction under the relevant provisions of the Act which could suggest that a trust having religious activity is not eligible for exemption - The DIT(E) was not justified in rejecting the application for grant of registration under section 12A of the Act and as well as the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of the CBDT, in our opinion, the DIT(E) has to apply his mind independently and pass an order in writing either granting or refusing registration u/s.12A. Since there is no indication in the impugned order that the DIT(E) has applied his mind, in our opinion, the matter needs to be considered by the DIT(E). Accordingly, we set aside the impugned order dated 3-6-2008 and remit the matter to the file of the DIT(E), Hyderabad. The DIT(E) shall consider the issue independently in accordance with law and thereafter decide the same on merits after giving a reasonable opportunity to the assessee." 3. After the matter was set aside by the ITAT, proceedings were taken up again by the DIT(E) for considering the assessee's application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gious objects, cannot be granted registration under section 12A of the Act. The DIT(E) further held that clause 30 of the Trust Deed empowering the trustees to carry on business activities cannot be considered as a wholly public charitable organisation. Thus on the conclusion arrived at on the aforesaid basis, the DIT(E) rejected assessee's application for registration under section 12A and 80G of the Act. 4. The learned A.R. submitted before us that commencement of activity is not a criteria and an irrelevant consideration for not granting registration under section 12A of the Act. In support of such contention, he relied upon a decision of the Hon'ble Karnataka High Court in the case of DIT(E) vs. Meenakshi Amma Endowment Trust (2011) 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts properly, the matter can be remitted to the DIT(E) for consideration afresh. 6. We have heard the submissions of both the parties and perused the material on record. We have also gone through the decisions placed before us by the learned A.R. On perusal of the Order passed by the DIT(E) we find that he has rejected the application for registration as well as the application seeking approval under section 80G basically on the following reasons : 1. The assessee trust has not commenced its activities. 2. The objects are not specific. Hence, are not verifiable. 3. The assessee trust is having mixed objects i.e., both charitable and religions. Hence, the registration cannot be granted. 4. Clause 30 of the trust deed entitles the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not mean that if the activities of the trust have not commenced, the Commissioner has authority to reject its application for registration on the ground that the Trust failed to convince him about the genuineness of the activities. That is what unfortunately the Commissioner did in the present case. In that view of the matter, we see no error in the Tribunal's impugned order reversing the order of the Commissioner. It is ofcourse true that even if the activities of the trust have not commenced, if the Commissioner has sufficient material in his command, he may still came to the conclusion that he is not satisfied about the objectives of the Trust or the genuineness of its activities. We understand the decision of the Tribunal according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be disentitled from claiming registration under section 12A of the Act. So far as the allegation of the DIT(E) that the objects of the trust are not specific and therefore, are not verifiable we find that such finding is vague and without any basis. On going through the objects of the trust, it is obvious that there are specific objects which are charitable in nature. Similarly rejection of the application by referring to clause 30 of the trust deed also cannot be held to be valid since it is a settled principle of law that for achieving its charitable object a trust or institution may also carry on business activity. Moreover, it is a fact on record that the DIT(E) before rejecting the assessee's application for registration has not disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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