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TMI Blog2015 (7) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... using to grant approval under section 12AA was passed without considering the clauses subsequent to clause 4 of the Trust Deed, particularly clauses 5(v)and 7 of the Trust Deed that clarify that the said sub-clauses(i), (j),(k) & (l) of clause 4 were incorporated to aid and achieve the charitable objects the appellant and that the said sub-clauses were not non-charitable in nature. 4. On the facts, the ld.CIT ought to have accepted the explanation and submissions of the appellant and granted registration under section 12AA of the Act to the appellant trust as prayed for. 5. On the facts, the ld.CIT failed to appreciate that the reasons given to deny the registration under section 1AA of the Act were not in accordance with the provisions of the Act and contrary to law and accordingly, the order of the ld.CIT is liable to be set aside. 6. For these and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal may be allowed". 3. The assessee is a trust created by a deed of trust dated 22-02- 2013. The assessee applied for registration u/s 12AA of the IT Act, 1961 vide its application in form-10A on 30-01-2014. The CIT rejected the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, learned DR has submitted that the CIT specifically issued the show cause notice to the assessee requiring the assessee to file the relevant record for examination. In response the assessee has filed a letter dated 29-04-2014 without complying the directions of the CIT vide show cause notice dated 24-04-2014 therefore, the assessee did not produce the relevant record for the examination of the CIT. He has relied upon the impugned order of the CIT. 6. We have considered the rival submissions and carefully perused the relevant material on record. Though, the CIT has issued a show cause notice dated 24-4-2014 however, after considering the response of the assesee the CIT has rejected the application for registration u/s 12AA by citing the only reason that the objects mentioned in sub-clause ,j, k,& l of the assessee trust an non-charitable in nature and have having not been deleted from the trust deed. For ready reference, we re-produce the order of the CIT. " M/s Assisi Education Trust had applied for registration u/s 12AA vide its application in Form 10A filed on 30-01-2014. During the course of verification it was observed that some of the objects of the applicant ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward scholarship, prizes, donations etc. for the poor and deserving students and institutions having similar objects. g) To establish maintain, run, improve develop libraries, reading rooms and other facilities for the benefit of the students and public. h) To publish books, periodicals, electro data processing and other communication media works without any motive for profit. i) To acquire by purchase, lease, mortgage loan, gift, grant or bequest movable or immovable properties of all description deemed necessary or useful for any of the purposes of the trust. j) To alienate and receive any gift whether money, property, movable and immovable, donations and contributions for the works of the trust. k) To alienate by way of sale, mortgage, lease, release, loan, pledge, exchange the properties of the trust as may be decided upon by the trustees in accordance with the Canonical provisions. l) To invest, lay aside, deposit I banks or otherwise deal with the money or funds of the trust in keeping with the objects of the trust". 8. As manifest from the objects of the assessee that even the objects under sub-clause i to l cannot be said to be non-charitable in nature, when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt and in Dharmadeepti Vs CIT1978 CTR(SC) 120: (1978) 114 ITR 454(SC): TC23R, 289 that the words 'not involving the carrying on of any activity for profit' qualify or govern only the last head of charitable purpose and not the earlier three heads. Where, therefore, the purpose of a trust or institution is relief of the poor, education or medical relief, the requirement of the definition of charitable purpose should be fully satisfied, even if an activity for profit is carried on in the course of the actual carrying out of the primary purpose of the trust or institution. But if the purpose of the trust or institution is such that it cannot be regarded as covered by the heads of relief of the poor, education and medical relief, but its claim to be a charitable purpose rests only on the last head advancement of any other object of general public utility, then the question would straight arise whether the purpose of the trust or institution involves the carrying on of any activity for profit. (i) the purpose of the trust or institution must be advancement of an object of general public activity; and (ii) that purpose must not involve the carrying on of any activity for profit. The firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. That being so, neither of he main objects can be classed under the residual general head. The advancement of any other object of the general public utility. Now those words are followed by the words not involving the carrying on of any activity for profit. Do these restrictive words govern the residual general head only or also the preceding specific heads relief of the poor, education and medical relief ?. The specific heads relief of the poor education and medical relief define well known charitable purposes. But the residual general head. The advancement of any other object of general public utility is of wide comprehension. This head was defined in the same terms in the definition of charitable purpose in s.4(3) of the Indian IT Act, 1922. The same words were used in English law to describe one of the heads of charitable purpose in Morice Vs Bishop of Durham (1805) 10 Ves.522,532. Under the English law, they were regarded as words of sufficiently extensive import to warrant the observation by the House of Lords in Williams Trust Vs IRC (1947) 27 Tax Cases 409: (1948) 16 ITR (Supp) 41 (HL) TC23R. 194, that all objects of general public utility were not necessarily charitable, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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