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2023 (3) TMI 429 - AT - Income TaxExemption u/s 11 - application for registration u/s 12AA denied - purpose of creation of Trust - Charitable activity u/s 2(15) - CIT(E) has alleged that applicant trust has created an arrangement whereby it is not only laundering its income but also diverting the same in the hands of the trustee/members - CIT(E) objection was that an arrangement was made by a group of persons who owns the land and had given this land on lease to their partnership firm which subsequently given to their trust at an exorbitant rent. As the trust has paid a huge rent, it becomes clear that these persons are diverting funds of the trust to a partnership firm which is nothing but an entity controlled by trustee/members of the appellant trust - HELD THAT:- Merely questioning the purpose of creation of Trust without disputing the charitable nature of objects, genuineness of activities and the manner of carrying out the activities of the trust in consonance to its objectives renders the impugned order of the Ld. CIT(Exemption) perverse to the facts on record. Further, the only requirement for granting the registration is that the object of the society should be charitable in nature and its activities were genuine. On this issue, case of M/s Ananda Society and Educational Trust [2020 (2) TMI 1293 - SUPREME COURT] has laid down the basic principles for allowing registration by observing that Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied in order to ensure that the object of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12 of the Act. If it appears that the objects of the trust and its activities are not genuine that is to say not charitable the Commissioner is entitled to refuse and in fact, bound to refuse such registration. Thus we hold that the appellant assessee’s grievance is genuine and accordingly, we direct the CIT exemption to grant registration to the assessee trust from the date of application - Appeal of assessee allowed.
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