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2015 (7) TMI 773 - ITAT BANGALORE

2015 (7) TMI 773 - ITAT BANGALORE - TMI - Registration u/s 12AA rejected - some of the object of the trust mentioned in sub-clauses-(i),(j),(k),and (l)of clause-4 of the trust deed are not charitable in nature - Held that:- Sec.11(1A) permits the income from voluntary contribution made with a specific direction that this shall form part of corpus. Similarly, sec.12(1) permit any voluntary contribution received by the trust created solely for charitable or religious purpose. Thus, receiving the c .....

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a schedule bank or co-operative society engaged in carrying on the business of banking as well as deposit in any account with the post office savings bank. Apart from the other investments as prescribed there under. Thus, we find that the objects under sub-clause-i to l are charitable in nature and cannot be termed as non-charitable

The assessee is not found to be involved in the activity of profit and the objects of the assessee are all only to achieve the main objects to provide edu .....

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to l of clause-4 of the trust deed are not charitable in nature is not sustainable and accordingly, the same is set aside. However, the assessee has not filed the relevant record, as required u/s 12AA of the Act to satisfy the authority concerned about the genuineness of the activity. We accordingly, direct the CIT to re-consider the application of the assessee for registration u/s 12AA of the IT Act, in the light of the above observation. - Decided in favour of assessee for statistical purposes .....

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. On the facts and in the circumstances of the case, the ld.CIT ought to have granted registration u/s12AA of the Act to the appellant trust on the basis of the application made. 2. On the facts, the order of the ld. CIT, is erroneous when she held that sub-clauses(i),(j),(k) & (l) of clause 4 of the Trust Deed were of non-charitable nature, without taking a holistic view of all the clauses of the said Trust Deed. 3. The order of the ld. CIT, is erroneous in as much as the order refusing to .....

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tion 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 c .....

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ee trust and submitted that the objects of the trust includes to provide education, learning, training facilities to students of all branches of education by all means possible. To achieve this main object of providing learning, training facilities to students of all branches the objects in clause-4 of the assessee also include to establish, start promote maintain, support run & guide schools, colleges, institutes training centres, research centres and all centres of learning and to educatio .....

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lease gift or grant or bequeath movable or immovable properties deem necessary or useful for the purpose of trust. Similarly, to accept and receive any gift whether the movable or immovable, donation or contribution for the work of the trust and all other acts in relation to the trust property for achieving the object of the trust including invest deposits in banks are permissible under the provision of sec.11 & 12 of the IT Act, 1961. Therefore, the said acts and purposes enumerated in sub .....

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assessee is entitle and eligible for grant of registration u/s 12AA of the IT Act, 1961. 5. On the other 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 .....

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leted 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 mentioned at subclauses i,j,k & l under clause-4 of the Trust Deed were not charitable in nature as they pertain to acquisition of property, acceptance of gifts, alienation of property by sale and inve .....

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miss the application for registration u/s 12AA. Consequently, the above application dated 30.04.2014 stands rejected. Sd/- (LAKSHMI HANDE PURI) CIT, MANGALORE To M/s Assisi Education Trust Bagambila, Deralakatta P.O 575 018 7. It is clear from the order that the sole objection raised by the CIT is non-charitable nature of the objects mentioned in the sub-clauses i,j,k & l of clause-4 of the trust deed. It is pertinent to mention that the objects stipulated in sub-clauses i to l of clause-4 a .....

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and impart education right from basic, preparatory and primary education upwards to the highest echelons of learning in all branches and fields of knowledge. c) To affiliate, collaborate or associate with universities, institutions or body public, private or government in order to provide high quality education, training and recognition to its students, source and institutes. d) To ward certificates, degrees, diplomas or any other due recognition, scholarships, free ships etc to its students an .....

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ommunication 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 b .....

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ng facilities to the students in all branches of education. The CIT has not disputed the objects of the assessee as per the other sub-clauses are charitable in nature. We further note from the clause 7(vi) of the trust deed these objects of investments are required to be in conformity with sec.13 r.w.s.11(5) of the IT Act. Therefore, these objects are strictly in consonance with the provisions of sections 11 & 12 of the IT Act. We find that sec.11(1A) permits the income from voluntary contri .....

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r religious purpose is transferred and whole or any part of consideration is utilized in acquiring the new capital asset than such capital gain is eligible for exemption. Section 11(5) permits the deposit in any account with a schedule bank or co-operative society engaged in carrying on the business of banking as well as deposit in any account with the post office savings bank. Apart from the other investments as prescribed there under. Thus, we find that the objects under sub-clause-i to l are .....

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he terms of s.2 cl.(15) which gives an inclusive definition of charitable purpose. It provides that charitable purpose includes relief of the poor, education, medical relief and the activity for profit. I is now well settled as a result of the decision of this Court 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 thr .....

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t 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 first condition does not present any diffi .....

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nd what is the nature of the limitation they imply, so far as he purpose of advancement of an object of general public utility is concerned . 9. Thus, it is clear that the assessee is not found to be involved in the activity of profit and the objects of the assessee are all only to achieve the main objects to provide education, learning, training facilities to the students of all branches of education. Therefore, all these ancillary objects included in the object clause of the assessee are found .....

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and other bodies with the object of promoting the two main objects. Having regard to the language used and he context in which the two main objects are set forth, it would be reasonable to identify the expression to give charity and to promote education with the first two heads, relief of the poor and education in the definition of charitable purpose in s.2(15) o the IT Act. If the MOA had referred to charity as the sole object without any limitation, including those prescribed by the context. .....

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l 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. Thi .....

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of general public utility were not necessarily charitable, and that while some may be so others may not. The law in India under the Indian IT Act, 1922, was not in congruency with the English law of charity in as much as by including those words in its statutory definition the Indian law extended the expression charitable purpose to an area beyond that covered by the English law. In other words, purposes recognized as charitable purposes under the English law, they extended also to objects which .....

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