TMI Blog2015 (11) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... in an application made by the Assessee Trust for registration u/s 12AA of the Act in Form No.10A read with Rule 17A was rejected. 2. Facts in brief:- The assessee is a Trust and was established on 22.10.2013. The main objects of the Trust are brought out in para 1 of the Ld.CIT(A), Ghaziabad order which reads as follows: the main objectives of the Trust are to provide health education including technical education, water conservation and environmental awareness and to establish medical colleges and hospitals etc. It filed an application in form no.10A under Rule 17A of the I.T. Rules, 1962 on 13.3.2014, for grant of registration u/s 12AA of the Act. The Ld.CIT, Ghazaibad rejected the said application on the ground that the assessee trust has not taken any steps in pursuance of its aims and objects, except acquisition of land and hence the genuineness of the activities of the Trust cannot be verified. He also stated that the evidence brought on record to show the capacity of the lenders who have advanced loans to the assessee trust, are not sufficient. Hence he rejected the application for grant of registration u/s 12AA of the Act, by concluding that the registration cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aws cited, we hold as follows. 6. In our view the Ld.CIT(A), Ghazaiabad s action of refusing to grant registration to the assessee u/s 12AA of the Act, is not in accordance with law for the following reasons. (a) The Ld.CIT(A), Ghazaiabad, does not dispute that the aims and objectives of the Trust are charitable in nature. (b) The reason given by the Ld.CIT(A) for refusing the registration is that, the second limb i.e. genuineness of the activities of the Trust, could not be verified, for the reason that the assessee has not taken steps in pursuance of its aims and objects, except for acquiring land is not legally tenable. This ground taken by the Ld.CIT for refusal of registration is not correct for the reason that: (i) The assessee had commenced activities by acquiring land. It was also pointed out that the State Government had exempted the assessee trust from payment of stamp duty on purchase of land, in view of the charitable aims and objectives of the Trust. (ii) Even otherwise, it is well settled that at the stage of grant of registration, the non-commencement of the activities by the Trust cannot be a ground for refusal of registration u/s 12AA of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 12AA of the Act and thus at that such initial stage the test of genuineness of the activity cannot be a ground on which the registration may be refused. This aspect of the view of the Tribunal is hence consistent with a judgement of the Division Bench of this Court and would not require this Court to take any different view. (b) The Delhi G Bench of the ITAT in ITA 5501/Del/12 in Sai Ashish Charitable Trust vs. DIT(E) held as under. 8. On a careful consideration of above rival contentions and submissions of both the parties and careful perusal of record, inter alia the impugned order, we clearly observe that the DIT(E) has not pointed out any defect or doubt about the charitable objects of the assessee trust. From the impugned order, we clearly observe that the DIT(E) has rejected the application of the assessee trust for grant of registration u/s 12A of the Act by holding that in absence of any genuine charitable activity, the genuineness of the charitable activities cannot be held to be established. At the same time, we observe that as per ratio of the decision of Hon ble Jurisdictional High Court of Delhi in DIT vs. Foundation of Ophthalmic Optometry Resea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person in receipt of the income derived from the property held under the trust wholly for charitable or religious purposes, whereas section 12 deals with the contributions received by the trust or an institution, established for charitable and religious purposes, receiving contribution, shall not be an income in terms of section 11. The benefit of sections 11 and 12 is available only if such trust or institution is registered under section 12AA. [Para 9] On the other hand, the provisions of section 10(23C) are the provisions of the Act in substitution of the earlier provisions of section 10(22) as to which income shall not be included in computing the total income of any person. Therefore, the provisions of sections 11, 12 or section 10(23C) deal with the income of a trust or of the institution and the circumstances as to when such income is to be excluded for computing the total income, but the basis of such benefit is the registration under section 12AA. Unless a trust or institution is registered under section 12AA, such trust or institution shall not be entitled to exclude from its total income, deductions or contributions or from other sources. Therefore, the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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