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2022 (2) TMI 1083 - AT - Income TaxExemption u/s 11 - denying registration u/s 12AA - CIT(E) concluded that the sole objective of the Trust was the construction of a Temple and so he rejected the prayer for registration - HELD THAT:- CIT(E) could not realize that the Trust was in dire needs of funds for pursuing its activities. The funds could be generated by the Trust after it was registered for tax exemption.Accounts of the assessee along-with the details submitted to the Ld. CIT(E) during the course of its registration proceedings indicate the activities. The Ld. CIT(E)'s concept of the manner of expending the corpus donations is neither in consonance with facts is misplaced. Section 12 of the Act does not prescribe any mode or manner in which any corpus donation has to be retained or expended. As to the transfer of the corpus of this Trust, in the event of its dissolution or discontinuation the sole condition is that the balance funds at the time of closure should be transferred to a like charity. In resolving to transfer the corpus in such an eventuality to M/s Thakur Shree Hari Das Ji Maharaj Trust no aberration of any sort can be conceived as having been committed by the Trust. Use of corpus donations and funds for charity was definitely in terms of the provisions of law and societal practice. The purchase of land and the construction of a building thereon were integral to the establishment and existence of the Trust and thus were entirely in consonance with the pursuit of charitable objectives. They were not in any way derogatory for any part of Section 2(15) of the Act as the Ld. CIT (E) erroneously seems to think. Focus should be on charity was in pursuit of charitable objects alone. Thus the trust is eligible for registration u/s 12AA of the Act. In case, the activities of the trust are found to be not in the nature of charitable activities in the wider public interest, subsequently the department would be at liberty to invoke the relevant provisions of the Act to tax the surplus amount and also to revoke the registration granted. - Decided in favour of assessee.
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