TMI Blog2012 (8) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 16-8-2012 - S Ravindra Bhat And R V Easwar, JJ. For Appellant : Mr. Abhishek Maratha, Sr. Standing Counsel with Ms. Anshul Sharma, Adv For Respondent : Mr. Ved Jain, Adv JUDGEMENT Per : S Ravindra Bhat, J : 1. The Revenue claims to be aggrieved by the decision of the Income Tax Appellate Tribunal (ITAT) in ITA No.202/DL/2009. By the impugned judgment, the ITAT had allowed the assessee s claim for registration as charitable trust under Section-12AA (1) (B) of the Act. The substantial question of law framed in this case is: - Whether the Income Tax Appellant Tribunal was right in holding that while examining the application under Section 12AA (1) (b) read with Section 12A of the Income Tax Act, 1961, the concerned Commissioner/Director is not required to examine the question whether the Trust has actually commenced and has, in fact, carried on charitable activities? 2. The assessee is a society incorporated under the Society Registration Act on 30.05.2008. Its objects as set out in its Memorandum of Association are as follows: - I. Arranging and formulation of courses for Optometry and Ophthalmic Education and implement the same by establishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Hon ble Allahabad High Court in the case of Fifth Generation Education Society (supra), non-commencement of charitable activity cannot be a ground for rejection of application filed by the assessee. Their Lordships in that case, after considering the provisions of Section 12A have observed that application of income need not be considered by the CIT while considering the application for grant of registration and their Lordships also observed that the objects being general in nature also cannot be a ground to reject the application of the assessee and the reason that no activity has been carried out also cannot be a ground for rejection of application. The observations of their Lordships from the said decision are reproduced below: - 2. A reading of the section shows that the registration under S.12A is a pre-condition for availing of the benefit under ss.11 and 12, Sec.11 provides for exemption of income which is applied for charitable purpose. Section 12 is in the nature of an explanation to s.11. Before a person can claim the benefit of s.11, or s.12, as the case may be, he must obtain registration under s.12A. The application for registration under s.12A has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion-12AA from inception itself. 6. Learned counsel for the assessee, on the other hand, submitted that in the absence of any bar in the statute denying the benefit, the Court or the tax authority ought not to impose restrictions. It was also submitted that this issue was considered in recent decision of the Karnataka High Court reported as Director of Income Tax (Exemptions) v. Meenakshi Amma Endowment Trust, (2011) 50 DTR (Kar) 243. In that case, the Trust was formed on 23.01.2008 and had applied for approval within nine months of its registration. Like in the present case the tax administrators refused to register it as a charitable trust. The Karnataka High Court reasoned as follows: - 4. The Tribunal taking into consideration the law laid down by the Division Bench of this Court in Sanjeevamma Hanumanthe Gowda Charitable Trust vs. Director of IT (Exemption) (2006) 203 CTR (Kar) 533 : (2006) 285 ITR 327 (Kar) held that depending upon the facts and circumstances, the concerned authority has to look to the objects and also the activities of the trust in order to consider the application for registration under s.12A of the Act and accordingly allowed the appeal by order dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e number of charitable objects in its bye laws, the activity carried on by the society is confined to its members numbering about 150. The activities, as mentioned above, cannot be treated as charitable in nature. It was on this basis the CIT came to the conclusion that it is not entitled to registration under s.12A. 8. Counsel for the Revenue had relied upon the decision of the Punjab and Haryana High Court in Aman Shiv Mandir Trust (Regd.) v. Commisisoner of Income Tax, (2008) 296 ITR 415 (P H) . In that case, the assessee had applied for registration under Section-12A almost in a defensive manner. It was carrying on its activity for more than three years and after some discrepancies were noticed by the Revenue and after notice had been issued, the assessee then applied for registration by filing form-15H. The Court found that the substantial amounts collected were kept in bank in the form of fixed deposits and there was no charitable activity. 9. The provision in this case i.e. Section-12A states that when a Trust is desirous of getting itself registered as charitable, it has to approach the Commissioner under Section-12AA. The powers of the Commissioner to register or r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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