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2022 (5) TMI 1384 - ITAT VARANASIExemption u/s 11 - grant of registration u/s 12A - CIT(E) has rejected the application of assessee for grant of registration u/s 12A on four grounds, firstly that the assessee’s constitution(MOA) does not have irrevocability clause, secondly that the constitution of the assessee also does not provide that in case of winding up/dissolution of the assessee, its funds /property will be transferred to another charitable entity, thirdly that the constitution of the assessee does not have a clause that the beneficiaries are a section of public and not specific individuals, and fourthly that the assessee will use its funds/property for its objects - HELD THAT:- CIT(E) asked assessee to incorporate these clauses in its constitution/MOA, but the assessee did not produce amended constitution(MOA), neither before the ld. CIT(E) and nor even before us. The primary condition for grant of registration u/s 12A is that the assessee is a public charitable trust and is required to fulfill the conditions as are mandated under the 1961 Act for grant of exemption from tax. In the instant case, the assessee constitution/MOA clearly provides that in case of winding up/dissolution of the assessee, the proceeds of assets /property shall be distributed amongst the members, which clearly militate against the charitable nature of the trust - there is no irrevocability clause, that the creation of the charitable entity is irrevocable and all the funds/ property which become part of the assessee shall not revert back to the contributories/members. The constitution/MOA of the assessee does not have a clause that property/funds of the assessee shall be used solely for the charitable objects of the assessee. Further the constitution/MOA does not have a clause that the beneficiaries of the assessee shall be public atlarge, and not specific individuals. The assessee has not produced amended constitution/MOA even before tribunal, and since the assessee is claiming itself to be charitable entity seeking exemption of its income u/s 11 and 12, the onus is on the assessee to prove that it is a charitable entity fulfilling all the statutory requirements. Under these circumstances, we do not find any merit in the appeal filed by the assessee, which stood dismissed.
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