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2011 (8) TMI 1136 - MADHYA PRADESH HIGH COURTExemption u/s 11 - Registration of Charitable Trust u/s 12A read with 12AA - Assessee, a trust, set up an engineering college for charitable purposes - Mere establishment of an engineering college does not constitute a charitable activity. Accordingly, the application preferred by the respondent under sec. 12A was rejected by CIT(A) - HELD THAT:- A careful reading of Section. 2(15), 12A and 12AA of the Act, reveal that application for registration under sec. 12A has to be made before the expiry of one year from the date of creation of the trust or establishment of the institution whichever is later. The application has to be made by a person in receipt of income of the trust. Thus, while dealing with the application for registration the CIT has to examine whether the application is made in accordance with s. 12A r/w r. 17A. He may also examine whether objects of the trust are charitable or not. Sec. 12AA nowhere provides that CIT while considering the application for registration is also required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit. The language employed by the legislature in s. 12AA only requires that activities of the trust or institution must be genuine which should be in consonance with the object of the trust. At this stage, the CIT is not required to examine the application of income. Admittedly the application submitted by the respondent was in consonance with the procedural requirement prescribed in this regard. From the trust deed which was filed before the CIT the objects of the trust could be ascertained. From perusal of cl. (3) of the trust deed we find that the objects of the trust are charitable in nature and are in tune with sec. 2(15) and, therefore, CIT rejecting the application under s. 12A was unjustified - Decision in favour of Assessee.
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