Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 49 - HC - Income TaxExemption u/s 11 - application u/s 12AA - charitable activity u/s 2(15) - HELD THAT:- Section 12AA of the Act provides for procedure for registration. The Commissioner of Income Tax is required to satisfy himself about the objects of the Trust and genuineness of its activities and has to grant registration only if it is so satisfied. The scope of examination is confined in ascertaining whether the Trust is constituted genuinely for carrying on charitable activities or whether it has the capacity to carry out its professed objects. It is also well settled legal proposition that at the time of grant of registration, Commissioner of Income Tax is not required to examine the application of income and has to examine whether the objects of the Trust are charitable and whether the application is made in consonant with requirements of Section 12A of the Act read with Rule 17F of the Income Tax Rules. The genuineness of the activities of the Trust is not a matter to be looked into at the time of dealing with the issue of registration of the Trust u/s 12AA. From conjoint reading of the aforesaid clauses of the Trust Deed, it is axiomatic that primary purpose / objects of the assessee enumerated in the Trust Deed are charitable in nature. The other clauses of the Trust Deed had to be necessarily read in the context of the aforesaid clauses. The Tribunal, after taking into account the relevant clauses of the Trust Deed has recorded a finding of fact that the primary object of the Trust is charitable in nature. Even otherwise, the activities of the assessee as set out in the Trust Deed are covered within the ambit of charitable purpose being primarily for education. The aforesaid finding by the Tribunal has not been assailed as perverse in this appeal. Therefore, the issue with regard to the activity of the assessee being commercial or business in nature, cannot be gone into at the time of consideration of the application under Section 12AA of the Act. Even otherwise, at the time of grant of registration the Commissioner of Income Tax, in the facts of the case could not have examined the genuineness of the activities of the assessee as its activity had not commenced. The issue regarding the satisfaction of genuineness of activity of a Trust is not a matter which can be looked into at the time of grant of registration under Section 12AA of the Act. Substantial questions of law Nos.1 to 3 involved in this appeal are answered against the revenue and in favour of the assessee. Grant of exemption or renewal as not automatic in character - HELD THAT:- As the decision of the High Court in 'GANJAM NAGAPPA & SONS TRUST Vs. DIRECTOR OF INCOME TAX' [2004 (1) TMI 29 - KARNATAKA HIGH COURT] has no application to the facts of the case and therefore, aforesaid question is also answered against the revenue.
|