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2017 (8) TMI 1689 - AT - Income TaxExemption u/s 11 - rejection of application u/s 12AA - no activity was carried out by a trust or institution - proof of charitable activity u/s 2(15) - HELD THAT:- The reasons given by the Ld. CIT(E ) does not sound good because , one side reasoned that no activity has been carried out by the Assesse Trust , on the other hand has doubted the intents of the objects and further observation that initially the Assessee wanted to construct school & meditation hall at Asar Doda but later purchased land for school at Niabhat, Nagrota , in our view , the trust that time was undoubtly at nascent stage and has not carried out any activity except to make efforts for procuring land for school however later on purchased the land for school at Niabhat, Nagrota , which clearly shows the intention of the trust as the main object of the trust is to establish schools etc. and to provide education, therefore, one can expect from the trust to do activity of the charity immediately and in that situation the authority cannot come to the conclusion that the intent contained in the objects of the trust do not find corroboration in the shape of any positive action taken towards either education or any of the other objects enunciated in the trust deed , as observed by the ld.CIT (E ) . Third reason that the activities of assessee trust are controlled by one family is only an apprehension of the Ld. CIT (E ) which according to our mind can not base rejection of the registration because the Revenue Authority is at liberty to withdraw and/or to cancel the Registration an any time on the specified reasons enumerated in the Act. As from the documents filed before us, it reflects that the assessee trust has already purchased the land which is 9 kanals 19 marlas situated at Village Balian, Teshil Udhampur, and further also got approved sanctioned plan for construction of school from the concerned Executive Engineer of the area , no objection for construction from the concerned Panchayat and construction of School is at advance stage and also executed Memorandum of Understanding with the Bhartiya Shiksha Samiti, which is involved in the field of imparting formal education having established a number of Primary and Secondary level Schools in different part of Jammu & Kashmir as submitted. Even otherwise if no activity was carried out by a trust or institution, still registration can be granted by the CIT(E) and even otherwise it is not the case of the Revenue that at the time of consideration of application of the Assessee , the assessee has carried out many activities and their genuineness were in doubt but in the instant case grievance of the CIT(E) is only that there was no activity carried out by the assessee. As at the time of disposal of application, the Ld. CIT(E) in order to satisfy himself about the genuineness of the activities of the trust or institution can call for such documents or information from the trust or institution as he thinks necessary and also empowered to make such enquiry as he may deem fit necessary in this behalf , secondly that after satisfying himself about the object of the trust or institution and the genuineness of the activities, he shall pass order in writing either register or refusing to register the trust or institutions. In the instant case no activity was carried out therefore question of genuineness did not arise. Hence, we direct the Ld. CIT(E) to grant the registration u/s 12A of the Act to the assessee and it is clarified in case, the assessee does not qualify/satisfy the objects of the trust and/or not involved in genuine activities , then the concerned authority shall be at liberty to withdraw or to cancel the registration u/s 12A of the Act. Appeal filed by the assessee is allowed.
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