TMI Blog2008 (11) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... r is satisfied about the objects of the trust and genuineness of its activities, he shall pass an order in writing registering a trust as per procedure prescribed in section 12AA of the Act - though it is inadvertently mentioned that the registration is effective from 15-11-2002 (the date of application for registration), yet it will take effect from 22-7-2002 being the date of creation of trust. On the date the assessment was framed the order of Commissioner Hisar registering the trust under section 12AA of the Act was available to the Assessing Officer but the same was ignored which is deplorable act on the part of Assessing Officer. The Assessing Officer, on the other hand, drawn support from the order refusing registration under section 80G of the Act. Registration under section 80G was refused as on that date registration under section 12AA was not granted. However, a pre-condition for eligibility of exemption under section 11 is registration under section 12AA of the Act and not registration under section 80G. This distinction was not noticed by Assessing Officer. Addition of cash credits - HELD THAT:- We find that the assessee has filed all the evidences which requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l education and to establish. Take over, organize, main, promote or run educational institutions, schools, colleges, professional institutions, academics, laboratories, libraries to carry out the above aims. ( ii )To hold seminars, arrange lectures, conferences, exhibitions, meeting/events for dissemination of knowledge and advancement in the field of technology, management, medicine, culture, fine arts and rural development. ( iii )To serve the cause of women and children by imparting technical, industrial and vocational training. ( iv )To give financial help, aid, scholarship (returnable or non-returnable) to the women, children and other economically weaker sections of the society to meet out the expenses of higher education, including medical and technical education and to work for the placement in India and abroad. ( v )To sponsor, open take over, establish, maintain promote to run orphan homes, Sanskrit pathshalas, houses for widows, working women, scheduled caste, scheduled tribes, backward class and OBC s, old men, an infants, dharamshalas, asharams, hospitals, clinics, dispensaries, laboratories and the like. ( vi )To provide the means for developments of sports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) therefore, held that basic disqualification attached to the original trust deed got removed and the trust deed as amended would be binding. The Commissioner allowed registration to the assessee trust vide order under section 12AA dated 28-5-2003 w.e.f. 15-11-2002 (the date on which application for registration under section 12A was made.) 7. As regards claim under section 10( 23C )( iiiad ) [earlier section 10(22)], learned CIT(A) held the same as not allowable as no activity which started in the accounting year in appeal. For claim of exemption under section 10(22) it has been held that only a systemized education on the established pattern in the country will be eligible for exemption. The concept of education will encompass systematic dissemination of knowledge and training. The element of normal schooling must exist. In the absence of activity started during the year, exemption under section 10( 23C )( iiiad ) is not allowable. 8. As regards exemption allowed under section 11, ld. CIT(A) noted that the objections of the trust are "charitable purpose" as defined in section 2( 15 ) of the Act. 9. As regards loan from three persons referred above, ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st and genuineness of its activities and hence passed an order registering the trust under section 12A of the Act. Once the trust registered under section 12A of the Act, the Assessing Officer cannot comment upon the objects of the trust so as to determine as to whether the same are charitable purposes within the meaning of section 2( 15 ) or not. For this purpose, reliance was placed on the decision of ITAT Ahmedabad in the case of Stock Exchange Ahmedabad v. Asstt. CIT [2000] 74 ITD 1 that of Hon ble Supreme Court in the case of Asstt. CIT v. Surat City Gymkhana [2008] 300 ITR 214 1 . Thus, the observation of the Assessing Officer for that registration under section 80G was denied or that objects of trust are for not charitable purposes are irrelevant. Though the objects are wide, what is to be examined is whether these objects are "charitable purposes" as defined in section 2(15) as defined in section 2(15) or not. Merely because the objects are wide, exemption under section 11 cannot be denied. Ld. CIT(A) on appreciation of the objects have held that the same fall within the definition of "charitable purposes" as defined in section 2( 15 ) of the Act and hence held the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucational institution for LLB Course, before Department of Education, Government of Punjab, Punjab University and Bar Council of India, (copy of approvals available at page Nos. 30-33 of paper book)." 15. He further submitted that the appellant society s college for B. Ed. Course commenced in financial year 2003-04. Copy of the prospectus- cum -information brochure for admission to B. Ed. Course for assessment year 2003-04 is enclosed at page Nos. 34-50 for paper book. Shri Gupta further submitted that under section 10( 23C )( iiiad ) ( iiiac ) in reincarnation of section 10( 22 ) and 10( 22A ) respectively and 10( 23C )( iiiad ) was inserted in Income-tax Act, 1961 by Finance (No. 2) Act, 1998 w.e.f. 1-4-1999, when simultaneously under section 10( 22 ) and 10( 22A ) were deleted by Finance (No. 2) Act, 1998 w.e.f. 1-4-1999. The provisions and the wording contained in section 19( 23C ) is same as in section 10( 22 ) and 10( 22A ) and the ratio of judgment from omitted section continuous to be applicable on newly inserted section 10( 23C ). In the facts and circumstances, the claim for exemption under section 10( 23C )( iiiad ) further finds support from the ratio of judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 658 (SC). The objects of the trust are not only for the purpose of education but includes other objects which though may be charitable purposes, cannot be considered as wholly for the purpose of education. Therefore, exemption under section 10(23C)( iiiad ) is not allowable. 18. We have heard parties at length. We shall first decide the appeal of revenue. The only ground for denial of benefit under section 11 are : (1) the objects are too wide, (2) registration under section 80G was denied. In our opinion, both these reasonings are not valid to deny benefit of exemption under section 11. The Commissioner is an authority to determine as to whether objects of the trust are for "charitable purposes" within the meaning of section 2( 15 ) and to examine the genuineness of its activities. Once the Commissioner is satisfied about the objects of the trust and genuineness of its activities, he shall pass an order in writing registering a trust as per procedure prescribed in section 12AA of the Act. There is no dispute that the trust was registered by the Commissioner vide his order date 27/28-5-2003. In the said order, it has been mentioned that the application was made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and genuineness available in paper book 1. Ram Dhall 5,75,000 Copy of PAN Card, copy of Income-tax return for assessment years 2003-04, 1997-98, copy of bank account, copy of balance sheet as at 31-3-2003 and 31-3-2002, copy of supporting for sub-source and copy of account of assessee in books of Ram Dhall. 2. Shiv Dhall 6,35,000 Copy of PAN Card, copy of Income-tax return for assessment years 2003-04, 1999-2000, copy of bank account, copy of balance sheet as at 31-3-2003 and 31-3-2002, copy of supporting for sub-source and copy of account of assessee in books of Shiv Dhall. 3. Archna Vij 2,00,000 Copy of Income-tax return for assessment year 2003-04, affidavit from corpus donation to assessee, copy of letter for donation dated 26-12-2002, copy of sub-source as affidavit from grandfather and copy of ownership documents of agriculture land. 14,10,000 20. We also find that whenever required the persons appeared before Assessing Officer and also confirmed giving of amount. They also proved their source for giving th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational institution has to engage in educational activities in India and should not be existing for profit. In the present case we find that for the relevant financial year, the assessee was engaged in process of setting up of educational institution and all the steps were directed towards the same. Therefore, the decision of Hon ble Supreme Court do not apply to the facts of the present case. 23. Hon ble Gujarat High Court in the case of Sorabji Nusserwanji Parekh ( supra ) held that in order to earn total exemption under section 10( 22 ), assessee should be an educational institution or an establishment which preliminary engages itself in educational activities. The element of imparting education to students of normal schooling where there are teachers and students must be present so as to fall within the scope of section 10( 22 ) and institution which only provide scholarship and grants to the students to enable them to pursue their educational activities without any control whatsoever on such students, and institution cannot be said to be a educational institution under section 10( 22 ). In that case though the trust, was established in 1956, till assessment year 1972- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
