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2015 (10) TMI 2104 - ITAT LUCKNOW

2015 (10) TMI 2104 - ITAT LUCKNOW - TMI - Registration u/s 12AA denied - charitable activity - construction of Dharmshala - as per the provisions of the trust deed only persons belonging to the Agarwal Community/Caste could become members of the Trust - Held that:- Following the ratio of the judgment of the Hon’ble Apex Court in Ahmedabad Rana Caste Association Vs. CIT (1971 (9) TMI 8 - SUPREME Courta), the registration u/s 12AA cannot be rightly refused. In this case, the Hon’ble Apex Court has .....

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ABAD High Court) that to make a purpose charitable, it is not necessary that it should be beneficial to the poor only and what is required is benefit to a section of the public as distinguished from specified individuals. Trust created for giving medical aid, social welfare, uplifting of poor members of the community and for giving financial and other help on the occasion of the marriage of the members of this community is for religious and charitable purposes. Respectfully following these two j .....

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ant registration u/s 12AA of the Income Tax Act, 1961 (for short the Act ) through an order dated 24.03.2015. 2. The brief facts, borne out from the records, are that the assessee trust filed an application in Form 10A on 30/09/2014 seeking grant of registration u/s 12AA of the Act. The assessee trust was created on 24.04.2013 and during the year ended on 31.03.2014, the assessee had purchased land for construction of a Dharamshala. No other activity apart from the purchase of land was carried o .....

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the Trust. Based on these findings, the trust was refused registration u/s 12AA of the Act. The Ld. CIT(Exemptions) also relied on one judgment of the Hon ble Delhi High Court in the case of Kirti Chandra Tarawati Charitable Society Vs. DIT(Exemption) reported in 232 ITR 11, and two judgments of the Hon ble Kerela High Court in the cases of Self Employers Service Society Vs. CIT reported in 247 ITR 18 (Ker.) and Dawn Educational Charitable Trust Vs. CIT reported in 370 ITR 724 (Ker.) while refu .....

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g of charitable activity and the benefit of registration cannot be denied to the assessee trust simply because no other charitable activity was carried out during the year. Countering the argument of the Department regarding the assessee trust catering only to the Agrawal Community/Caste, the Ld. AR of the assessee placed reliance on the judgment of the Hon ble Apex Court in the case of Ahmedabad Rana Caste Association Vs. CIT reported in 82 ITR 0704. Ld. AR of the assessee further relied on the .....

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to existence on 24.04.2013. Further on 07.07.2013, the assessee trust has purchased a plot measuring 498.17 sq.mtr. in area and another plot measuring 351.30 sq.mtr. in area on 30.07.2013 on which the Dharmshala was proposed to be built. This purchase of land amounting to ₹ 23,02,540/- is also duly reflected in the balance sheet of the assessee trust drawn on 31.03.2014 and is available on page 51 of the paper book. 7. It will also be worthwhile to reproduce section 12AA of the Act at this .....

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jects of the trust or institution and the genuineness of its activities, he (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. 8. It is seen that Section 12AA confers powe .....

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stering the trust or institution. If he is not satisfied, he would refuse the registration. In our view, while considering the issue of registration under section 12AA, the scope of enquiry of the Commssioner would be limited to the aforesaid extent. On the facts of the case, it is seen that this is the first year of the assessee trust and at the time of filing of application for registration there were no substantial activities. The Ld. CIT(Exemptions) drew adverse inference on inactivity which .....

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see trust. However, no inference about the objects being non-charitable in nature was drawn. Reference can be made to the decision of the Hon ble Allahabad High Court in the case of Hardayal Charitable & Educational Trust vs. Commissioner of Income Tax reported in 355 ITR 534 (All) wherein the Hon ble High Court has held as under: at the time of registration under Section 12AA of the Income Tax Act, which is necessary for claiming exemption under Section 11 and 12 of the Act, the Commissione .....

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efore the horse. At this stage only the genuineness of the objects has to be tested and not the activities, which have not commenced. The enquiry of the Commissioner of Income Tax at such preliminary stage should be restricted to genuineness of the objects and not the activities unless such activities have commenced. The Trust or society cannot claim exemption, unless it is registered under Section 12AA of the Act and thus at that such initial stage the test of the genuineness of the activity ca .....

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