TMI Blog2015 (12) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... is running a school as per its charitable objects and it is not the allegation of the CIT that the activities carried on by the assessee trust are not in consonance with its objects as per trust deed. We are of the view that the CIT rejected an application for registration u/s 12AA of the Income Tax Act, 1961 without any justified reason and basis despite the fact that the objects of the applicant trust are charitable and no allegation has been brought out on record by the CIT that the assessee is conducting activities beyond its object as per trust deed or fees and donations are being used for the activities which are not charitable and beyond the ambit of the objects of the assessee applicant trust, hence, we direct the CIT that the applicant trust should be granted registration u/s 12A - Decided in favour of assessee. - I.T.A. No. 6000/Del/2014 - - - Dated:- 30-11-2015 - Shri N. K. Saini, Accountant Member And Shri Chandra Mohan Garg, Judicial Member For the Appellant : Shri Naveen Gupta, Adv For the Respondent : Smt. Suntia Kejriwal, CIT DR ORDER Per Chandramohan Garg, J.M. This appeal by the assessee has been directed against the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly contended that for assessment year 2012-13, the appellant trust was assessed u/s 143(3) of the Act and nil returned income was accepted as per order dated 5.11.2014 available on assessee s paper book page 17 to 19. Learned counsel of the assessee also submitted that all statutory conditions for grant of registration u/s 12AA of the Act are fulfilled and it is a well-settled proposition that for grant of registration u/s 12AA of the Act, the only inquiry required to be made by the CIT is that the aims and objects of the applicant trust should be charitable in nature and trust should be genuine. To support this proposition, learned counsel of the assessee has relied on the following judgements/orders of Hon'ble High Court and coordinate benches of the Tribunal:- i) Fifth Generation Education Society vs CIT 185 ITR 634 (All) ii) Mormugao Port Trust vs CIT 109 ITD 303 (Panaji) iii) Malli Ram Charitable Trust v CIT 260 ITR (AT) 118 (Amr) 5. It was further submitted that the main objections of the CIT are that:- i) the appellant has undertaken only one object of running the school out of 21 objects. ii) all the trustees appear to be from one family/relatives i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board of trustees and Minutes book were duly maintained in the form of computer printout duly sanctioned by the Board of trustees and copies were filed before the CIT and originals were also produced for his kind perusal. Learned counsel of the assessee finally pointed out that the CIT rejected the application of the assessee without any basis and justified reasons, therefore, he may kindly be directed to grant registration u/s 12AA of the Act. 9. Replying to the above, ld. CIT DR placed reliance on the decision of Hon ble Punjab Haryana High Court in the case of CIT vs Guru Gorakh Nath Charitable Educational Society dated 5.5.2015 in I.T.A. 336/2013 and submitted that the CIT was entrusted with powers u/s 12AA of the Act to look into the activities of the Trust and to satisfy himself regarding the charitable nature of the activities. Ld. CIT DR further submitted that u/s 12AA of the Act, the provisions of section 11 12 shall not apply in relation to the income of any trust or institution unless various conditions are fulfilled and therefore provisions of section 12AA also give power under sub-section (3) to cancel the registration of the activities of the Trust if it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritable Trust vs DIT(E) reported as 285 ITR 327 (Karnataka) wherein their lordships have set out the guidelines for the purpose of grant of registration u/s 12AA of the Act and has held that the registration granting authorities have to be satisfied about the genuineness of the activities of the Trust or institution and they are required to see that how the income derived from the trust property is applied to charitable purposes. 12. In the present case, on careful perusal of impugned order, we note that the CIT has considered irrelevant factors in rejecting the application of the appellant trust. The objects of the applicant trust as mentioned in Trust deed are charitable in nature and the application for registration cannot be rejected merely because applicant trust undertook only one activity out of 21 objects and activities proposed in the trust deed. So far as the allegation of the CIT that the income derived by the trust either by way of donation or by way of fees from the students is concerned, there is no allegation that the receipts from fees were applied or used by the assessee trust for the purpose other than the aims and objects of the trust. From the impugned order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On this issue, it is relevant and necessary to take respectful cognizance of the order of Hon'ble Punjab Haryana High Court in the case of CIT-I vs Baba Kartar Singh Dukki Educational Trust reported as 221 Taxman 493 (P H) wherein speaking for the Jurisdictional High Court, their lordships held as follows:- 4. We have heard counsel for the parties, perused the impugned order as well as the order passed by the Commissioner of Income -tax and the substantial questions of law but find no reason to hold that the impugned order suffers from any error or raises a substantial questions of law much less questions of law framed by the revenue. The object of Section 12AA of the Act is to examine the genuineness of the objects of the Trust and though while examining genuineness, the income as well as resources of the Trust may be taken into consideration but any suspicion as to these facts cannot be the sole criteria for rejecting an application under Section 12A of the Act. This apart, there appears to be a misconception amongst officers exercising power under Section 12AA of the Act that if a trustee is a life long member of a Trust, it automatically raises an inference that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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