TMI Blog2021 (6) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... h the object to render services in the field of education by establish and operating schools and educational institutions in respect of any reservation for any caste creed race religion or language. In paragraph 4 of the impugned order it is mentioned that in order to fulfill its objectives the trust has been running a school by the name of the Aryans School at Atri Gardens Sipri Bazar, Jhansi. The Aryans School is an English Medium School, affiliated with CBSE Board, upto Class 12th. Commissioner exemption has sought the information from the assessee, as mentioned by her in with respect to the permissions received from the competent authorities with respect to charitable activities carried out by the assessee, which are material for the purposes of achieving its objects. It is clear that the Commissioner exemption had not specified which are the competent authorities, from which the assessee was required to seek the approval/permission and which according to Commissioner exemption are material for achieving its objects in the absence of specific querry it was not possible for the assessee to answer it. The perusal of these documents shows that the assessee have all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are contrary to the facts of appellant's case and even to the material/evidences placed on records. 3. That while arbitrarily rejecting the application for seeking registration U/S 12AA of the Act filed by the applicant, the learned CIT(E), Lucknow has completely brushed aside and disregarded that in the light of material/evidences placed on records it was beyond doubt evident that from last number of years, the appellant charitable Trust was genuinely conducting the charitable activities strictly in accordance with its objects and it had duly complied with all the necessary requirements of any other law, which were material for the purpose of achieving its objects and therefore appellant charitable Trust deserves for grant of registration U/S 12AA of the Act. 4. That in any view of the facts and circumstances of the case of the appellant charitable Trust it is entitled for grant of registration U/S 12AA of the Act, which be kindly granted. 5. That the order U/S 12AA(1)(b) (ii) of the Act dated 22nd December, 2020 is against the law and facts of the case of the appellant charitable Trust. 6. The appellant seeks permission to modify and/or add any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic charitable objects or purposes. vii) To borrow, raise loan from any person, bank or financial institution in such manner as the Trustees shall think proper or convenient for the furtherance of objects of the Trust and for this purpose the Trustees may secure repayment of these loans in any manner as may be decided from time to time. viii) The Trust shall be entitled and be at liberty to accept gifts, donations, voluntary contributions in money or otherwise from any person, firm or institutions or Government and to collect subscription, donation or aid from State Government, Central Government to augment the Trust Fund towards the corpus or otherwise and to use such money for the objects of the Trust but the Trust shall return the gifts of immovable properties received for carrying out specific object, back to the donors or their legal heirs, if the Trust does not carry out the object for which the gift of immovable property was made even when such transfer of immovable property was made by an irrevocable gift deed. ix) To do all necessary acts for and incidental or conducive for the attainment of above objectives of the trust and to give donations to institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order passed by CIT exemption the assessee is in appeal before us on the ground mentioned herein above. Submissions Of The Assessee 9. Ld. for the assessee had submitted that the Ld. CIT(E) issued an online questionnaire dated 30.07.2020 for the 'Assessee Trust' containing 26 questions, reply to which was sought by August 18th, 2020, a copy of which is being attached at pages 4 to 6 of this paper compilation 10. Ld. for the assessee had submitted that the 'Assessee Trust' furnished reply dated, August 16th, 2020 vide e-proceedings Response Ack. No. 16082013385047 and August 17th, 2020 vide e-proceedings Response Ack. No. 17082013385050, copies of which are being attached to this synopsis along with the copies of the entire paper submission filed online before the Ld CIT(E) and before the designated due date of August 18th, 2020. On a bare perusal of such online paper submission, one can easily conclude that the assessee charitable trust had furnished reply to all the 26 queries raised by the Ld CIT(E) along with the relevant paper evidence, material information and material records. 11. Ld. for the assessee had submitted that the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant provisions of the Act. The Ld CIT(E) has also not doubted the genuineness of activities carried on by the assessee charitable trust . 15. Ld Ar further submitted that as far as compliance of such requirements of any other law for the time being in force by the trust as are material for the purpose of achieving its objects is concerned, it is worth mentioning that the 'Assessee Trust' is duly registered under the laws as applicable over it and are material for the purpose of achieving its objects such as it is affiliated under CBSE, it has enrolled students under RTE, 2009, etc details of which it had duly submitted before the Ld CIT(E) in its paper submission which out of lackluster approach were not taken cognizance of by the Ld CIT(E) and a rejection order was passed in a cryptic manner mentioning that the 'Assessee Trust' had not made necessary compliance under relevant laws, when in fact the 'Assessee Trust' was duly affiliated under CBSE. 16. Ld AR submitted that therefore, as it is obvious from the above that the 'Assessee Trust' also satisfies the condition where compliance of such requirements of any other law for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust. 18. That in the case of Commissioner of Income-tax, (Exemption)v. Association of Third Party Administrators [2020] 114 taxmann.com 534 (Delhi), the Hon'ble Delhi High Court observed the following, 4. We have carefully examined the record and given due consideration to the contentions urged by Mr. Maratha. At the initial stage of registration, we have to examine whether the proposed activities of the assessee can be considered charitable within the meaning of section 2(15) of the Act. On an application for registration of a trust or institution made under section 12AA, the Principal Commissioner or Commissioner shall call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution; and the compliance of such requirements of any other law for the time being in force by the trust or institution, as are materials for the purpose of achieving its ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness of the activities of the trust or the institution. [Para 34] That similarly Jurisdictional High Court in the case of CIT v. Babu Ram Education Society [2018] 96 taxmann.com 606 (All.) wherein at the instance of the Department order passed by the Agra Bench of the ITAT was put up for judicial scrutiny before the Hon'ble Allahabad High Court. The Hon'ble Court held as under: Section 12A of the Income-tax Act, 1961 - Charitable or religious trust -Registration of (General) - Whether registration of trust does not involve enquiry into actual activities or application of funds, etc. and at that stage, only enquiry required to be conducted is with respect to object of trust alone and if assessee is found to have been actually engaged in any non-charitable activity, benefit of exemption may be denied in manner provided by Act - Held, yes - [Para 7] [In favour of assessee] (Head Note) That In the case of CIT v. Spring Dale Educational Society [2011] 16 taxmann.com 282/[2012] 204 Taxman 11 (Mag.) the Hon'ble Punjab Haryana High Court held as under: Section 12AA of the Income-tax Act, 1961 - Charitable or religious trust - Registration pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me claiming exemption u/s 11 of the I.T. Act. The said view has also been adopted by this Bench in the case of Rasee Educational Institute v. CIT (Exemption) Lucknow in [IT Appeal No. 462/Agra/2017 wherein vide order dated 30.07.2008] similar view was adopted where identical objections were raised by the ld.CIT(E ).That in the case of CIT Vs M/s. Reham Foundation Kandhari Lane Lal Bagh Lucknow (High Court Allahabad, Lucknow Bench), Income Tax Appeal No. 37 of 2017, dated 26.09.2019, the Hon'ble Full Bench of Allahabad High Court, held that, 31. In view of the above the answer to questions referred are answered as under:- The income tax Appellate Tribunal while hearing an Appeal under Section 254(1) in a matter where registration under Section 12(AA) has been denied by Commissioner income tax can itself pass an order directing commissioner to grant registration in case the income tax Appellate Tribunal disagrees with the satisfaction of the Commissioner on the basis of material already on record before the Commissioner The power of the Appellate Tribunal are co-extensive with the power of the Commissioner under Section 12 (AA) of the Act, 1961 subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larships, awards or any other assistance or otherwise to deserving students or schools, to further the course of study and or research. iv. To promote and carry out all other activities of charitable purpose including spread of education, medical relief, relief of poor and advancement of any other object of general public utility as the law may regard as public charitable objects or purposes. v. In order to fulfill its objectives the trust has been running a school by the name of the Aryans School at Atri Gardens Sipri Bazar, Jhansi. The Aryans School is an English Medium School, affiliated with CBSE Board, upto Class 12th. vi From the material on record it appears that the applicant is running a school to earn profit as no details with evidences were submitted regards any scholarship or concession of fees given to any student in A.Y. 2018-19 2019-20. No proof was submitted to corrobor of fees given to any student in A.Y. 2018-19 2019-20. No proof was submitted to corroborate the charitable activities claimed to be carried out by the applicant. vii Also the applicant has not furnished the annual financial statements for the applicant's trust. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the applicant. In other words, the applicant is not prevented from obtaining/complying with other laws, as necessary, by lack of registration u/s 12AA. Hence the applicant is free to make a fresh application for registration after obtaining necessary permissions/approvals/affiliations. 21. It was submitted that the assessee had failed to demonstrate that the assessee is having the affiliation from the Central Board Of Secondary Education, further it had not provided the details complying with the provisions of Right to Education Act, 2009, and other statutory requirement which are necessary for functioning of the schools. 22. The DR for the revenue had submitted that the case law relied upon by the assessee are not applicable to the facts and circumstances of the case, as new requirement in law have been introduced by virtue of the amendment with effect from September 2019, whereby it was incumbent and obligatory on the part of the Commissioner exemption to ensure that the assessee must be comply with the relevant requirement of other law for the time being in force at the time of registration . He had taken us to the provisional affiliation granted by the central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riting refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such applications under that sub section from the stage at which they were on that day. (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) or clause (ab) of sub section (1) of section 12A. Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A as it stood before its amendment by the Finance (No. 2) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chieving its objects, and may also make such inquiries as he may deem necessary in this behalf; and] 26. So far as the first respect of satisfaction of the lower authority pertaining to genuineness of the activities of the trust is concerned, the law is fairly settled by the decision of the Hon ble Supreme Court in the matter of Anand social (supra), which requires the lower authorities to examine the memorandum of Association/or objects of the trust for the purpose of coming to the conclusion whether the activities of the assessee are genuine or not . Undoubtedly in the present case the activities of the assessee are genuine as is clear from the chart of the activities reproduced herein above. Further the assessee is also claiming exemption under section 10(23) of the Act from the respondent for the last three years i.e 2017-18 to 2019-20 , which were granted to the assessee for the purposes of imparting the education only( pages 36 to 40 PB) . Thus the first condition as stipulated under section 12AA , regarding the genuineness of the activity have duly been proved by the assessee before the Commissioner exemption. We have no doubt about the genuineness of the activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had only raised vague question to the assessee asking it submitted approval / permission from the competent authorities. The questions raised by the commissioner are as under 24. If your trust/society is an educational institution, please furnish details of all the students enrolled in your institute during last three years under Right to Education Act, 2009. 25 Please furnish copies of approvals/permissions received from the Competent Authorities, with respect to the charitable activities carried out by you In the past three years, under the relevant respective laws, which are material for the purpose of achieving your objects. 33. In response to the question, the assessee had pointed out that the assessee is having approval from the Central Board Of Secondary Education and the assessee is also complying with the requirement of Right To Education Act. The relevant portion of the reply given by the assessee is as under :- 24. The trust is running an educational institution and the list showing names of students enrolled under Right To Education Act 2009 during the last three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material for fulfilment of the objects of the assessee. The Commissioner exemption should keep in mind that the scope and ambit of the enquiry under the Act is only limited. The Commissioner exemption cannot look into whether the approval or 37. permission was rightly given or not. 38. Further we are of the opinion 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 and once it or any other equivalent body 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, in our opinion 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. 39. The purpose of grant of registration is to ensure that the assessee is primarily into charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Code 2005, Fire and Life Safety Certificate, Save Drinking Water and Sanitary Conditions Certificate etc. 1. In compliance of the direction , the assessee had filed had filed following documents on 2.6.2021 : a. Copy of certificate under National Building Code. b. Copy of certificate from Jhansi Nagar Nigam certifying the entire school campus being surrounded by pucca boundary, c. Copy of certificate from the office of Nagar Nigam, Jhansi regarding Safe Drinking Water and Sanitary Conditions. d. Copy of Fire Safety Certificate from the office The Chief Fire Officer, Jhansi, e. Copy of certificate under Right to Education Act, 2009 from the office of Zila Basic Shiksha Adhikari, Jhansi , and f. Evidence showing online affiliation details of the school run by the Assessee Trust by the name of The Aryans School , under Central Board and Secondary Education (CBSE) up to 31.03.2025. Such extension was given by the CBSE in continuation to its last certificate dated 18.07.2017 wherein affiliation was granted by the CBSE from 01.04.2017 to 31.03.2020 43. The perusal of these documents shows that the assessee have all the requisite permissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner. In case the Commissioner is satisfied with the genuineness of the activities and even the objects, he can register the Trust under Section 12AA of the Act of 1961 and in case the Commissioner is not satisfied or refuses registration, then the Appeal lies to the Tribunal to challenge such order under Section 254 of the Act, 1961. 11. In such case, the Appellate Tribunal needs to adjudicate the issue raised before it because it is the last court of facts. The exemption under Sections 11 12 of the Act of 1961 can be sought only after registration of the Trust, thus satisfaction of the Commissioner before registration has been given importance. In view of above, the argument of the learned counsel for the Revenue is that unless such a satisfaction, as envisaged under Section 12AA of the Act of 1961 is recorded by the Commissioner, a direction for its registration should not be given by the Tribunal. As against the aforesaid, the argument of learned counsel for the assessee is that if Tribunal is satisfied about the genuineness of the activities and the object then it can direct for registration. Accordingly the appeal of the assessee is allowed. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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