TMI Blog2013 (1) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of the activities of the Trust is to be seen and the stage for application of income is yet to arrive i.e. when such Trust or Institution files its return. The object of Section 12AA, is to examine the genuineness of the objects of the Trust, but not the income of the Trust for charitable or religious purposes The Trust was not set up for charitable purposes and it was utilizing its income not for the said purpose cannot be examined at this stage as only objects of the Trust had to be considered by the Commissioner. The Trust was in nascent stage and was yet to work towards its objects. No substantial question of law - Decides against revenue - ITA No.5 of 2012 - - - Dated:- 16-10-2012 - MR. AJAY KUMAR MITTAL AND MR. GURM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding identity and capacity to make initial investment in the Trust by the trustees? v) Whether the Hon'ble ITAT is justified in directing to grant registration when the six settlers cum trustees have autocratic and discretionary power to remove any Trustee other than the settler one without giving any notice or reasons whatsoever? 3. Record of the appeal shows that the respondent-Trust had moved an application under Section 12A(1) (aa) of the Act in form No.10A on 18.7.2010 accompanied by copy of the Trust deed dated 23.6.2010 and form No.10B. The said application was rejected by the Commissioner of Income Tax, Rohtak (hereinafter referred to as the CIT, Rohtak ) vide order dated 26.11.2010. The conclusion arrived at by the CIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal of the respondent-Trust and set aside the order of the CIT, Rohtak after taking into consideration the provisions of Section 12AA of the Act and the objects of the Trust. The Tribunal noticed that the properties were in the name of the Trust and not in the name of the trustees by referring to the conveyance deeds. It was noticed that the power of the Board of the trustees to remove the trustees except the founder trustees was also such, if the work of any trustee was not satisfactory or against public policy and interest of the Trust. The Tribunal held that the power to convert the Trust property was to be gone into at the time of assessment and was general power for facilitating the proper functioning of the Trust. The evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome is yet to arrive i.e. when such Trust or Institution files its return. Relevant portion of the judgment reads as under:- We have heard learned counsel for the appellant, but find no merit in the present appeals. As per Section 12AA of the Act, an application for registration of the Trust and Institution is required to be made within one year from the date of creation of the Trust or the Establishment of such Institution. The procedure for registration of the Trust or Institution is prescribed under Section 12AA of the Act. In terms of Clause (a) of Section 12AA of the Act, the Commissioner is to satisfy himself about the genuineness of the activities of the Trust on such inquiries as he may deem necessary. Sub-section (1A) and (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration under Section 12AA of the Act. Unless a Trust or Institution is registered under Section 12AA of the Act, such Trust or Institution shall not be entitled to exclude from its total income, deductions or contributions or from other sources. Therefore, the principles laid down for excluding the income from consideration under Section 10(22) now 10(23)(C) or Sections 11 and 12 are not applicable while considering the application for registration under Section 12AA of the Act. The application for registration is required to be made within one year of the creation of the Trust. Section 12AA of the Act, requires satisfaction in respect of the genuineness of the activities of the Trust, which includes the activities which the Trust is u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on should be granted to the respondent-society with the rider that the same could always be cancelled if it came to the notice of the CIT that the society was not carrying on the activities as per its objects. The Commissioner while processing the application under Section 12AA of the Act was not to act as an Assessing Authority and thus, the Tribunal has rightly allowed the appeal filed by the society in the facts and circumstances of the present case. 8. Accordingly, in view of the aforesaid pronouncements of this Court which are fully applicable in the present case, the submission of the counsel for the revenue that the Trust was not set up for charitable purposes and it was utilizing its income not for the said purpose cannot be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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