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2015 (7) TMI 954 - HC - Income TaxClaim of registration under Section 12A - whether Tribunal erred in allowing the appeal by ignoring the clauses found in the Memorandum of Association, which permitted the assessee to utilize the funds for religious purposes and carry on commercial activity by constructing and letting out community hall? - Held that:- It is settled law that in the first year when the trust is sought to be registered, it could not have carried on any activity, thus the question of verifying the genuineness of such activities cannot be considered. The refusal to register the Trust on such ground by the DIT (Exemptions) could not thus be justified. The Tribunal has relied on case of Sanjeevamma Hanumanthe Gowda Charitable Trust – vs - Director of Income Tax (Exemptions) [2006 (3) TMI 91 - KARNATAKA High Court] wherein held that for arriving at the satisfaction for genuineness of the Society or Trust, the Commissioner has to look at the objects of the Trust and it is not authorized to go into the nature of the activity by which the income is derived by the Trust. In the present case, the question is with regard to the registration of the Trust in question wherein the objects have been clearly specified. The question of assessing the activities of the Trust would arise only after the Trust is registered and carries on the activities. At the time of initial registration, the same cannot be a question to be considered. In our view, the Tribunal has rightly allowed the appeal and directed the DIT (Exemptions) to register the Society as a religious Trust under Section 12A of the Act. - Decided in favour of the assessee
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