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2020 (3) TMI 464 - AT - Income TaxExemption u/s 11 - rejecting the application made for registration u/s 12AA - rejecting application of Form No.10G made for grant of approval u/s 80G(5)(vi) - whether a trust or a charitable organization is mandatorily required to perform charitable activities as per trust deed before proceeding to file an application for registration u/s 12AA or u/s 80G(5)(vi)? - HELD THAT:- We observe that in the impugned order Ld. CIT(E) has not questioned the genuineness of the objects mentioned in the trust deed. Therefore, so far as the objects of the assessee trust mentioned in the trust deed page placed at 5 & 6 of the paper book have been considered to be charitable in nature. As relying on D.P.R. Charitable Trust [2011 (8) TMI 1136 - MADHYA PRADESH HIGH COURT] it can safely conclude that carrying out of actual charitable activity cannot be a pre-condition for granting registration u/s 12AA of the Act. What needs to be done on the part of the assessee is to fulfill the requirements as provided in Rule 17A and also guidelines provided in Form No.10A/10G in the Income Tax Rules 1962 and if Ld. CIT(E) founds that the application has been properly made and the objects of the Trust are charitable in nature as per the provisions of Income Tax Act then the assessee should not be denied the registration u/s 12AA of the Act. However, in case the activities of the trust or the institution are being carried out in a manner that the provision of section 11 & 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then the Pr. Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution, as provided in sub-section (4) of section 12AA of the Act unless it is proved that there was a reasonable cause for the activities to be carried out in the said manner. We direct the Ld. CIT(E) to grant registration u/s 12AA of the Act to the assessee. As regards granting of approval u/s 80G(5)(vi) of the Act, the issue is restored to the file of Ld. CIT(E) for reconsideration - Decided in favour of assessee.
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