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2015 (12) TMI 693 - ITAT DELHI

2015 (12) TMI 693 - ITAT DELHI - TMI - Registration u/s 12AA cancelled - applicant trust undertook only one activity out of 21 objects - Held that:- 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 dee .....

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unning the institution managed by the assessee trust. Admittedly and undisputedly, this fact has been noted by the CIT that the appellant trust 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 b .....

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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 CIT, Faridabad dated 26.9.2014 passed u/s 12AA(1)(b)(ii) of the Income Tax Act, 1961 (for short the Act). 2. The sole effective ground raised by the assessee reads as under:- That the .....

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pellant filed an application for registration u/s 12AA of the Act before the CIT, Faridabad on 19.3.14 accompanied by a copy of the Trust deed and other relevant documents. In order to verify the nature of assessee appellant s objects, the Commissioner issued some questionnaires and replies were filed by the appellant. Ld. CIT, Faridabad, however, held that the applicant trust failed to substantiate its claim that its aims and objects mentioned in the Memorandum of Association are charitable in .....

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d on record. Learned counsel of the assessee submitted that all objects of the appellant Trust are charitable in nature as per clause (iii) of the Trust deed which also shows that the trust is created wholly for charitable purposes and not for the benefit of any particular religion or caste or to carry on any business for profit. Learned counsel of the appellant further submitted that income of the appellant trust is not for the benefit of any particular individual person or office bearer of the .....

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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 E .....

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deed provides for amending the Trust which could not be provided as per judgment of Hon'ble Supreme Court in the case of HEH Nizam s Pilgrimage Money Trust vs CIT 243 ITR 676 (S.C.). v) The Trust has not maintained proper minutes books. 6. Learned counsel of the assessee contended that all these allegations are baseless and have no relevance with the satisfaction of the CIT which is required for the purpose of grant of registration u/s 12AA of the Act. 7. Learned counsel of the assessee subm .....

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lied on the judgment of ITAT Ahmedabad in the case of Jupiter Medical Research Centre Trust 128 TTJ (Ahmedabad) (UO) (118) and submitted that even the trustees could be from one family and in the present case, trustees are from three different families. Learned counsel of the assessee also pointed out that in some extraordinary situation, the trust could be dissolved but clause XVI of the trust deed clearly mandates that upon dissolution of the trust, its assets shall be handed over to similar t .....

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Court has followed the decision of Hon ble Supreme Court in the case of CIT vs Kamla Town Trust 217 ITR 699 (S.C.). 8. Learned counsel of the assessee lastly pointed out that the applicant trust submitted all the required and relevant records of all the resolutions passed in the 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 .....

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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 not carried out in .....

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tified in rejecting the application of the assessee. 10. Replying to the above, learned counsel of the assessee also submitted € rejoinder and submitted that charging of fees is not a bar as per judgment of Hon'ble Supreme Court in the case of Aditanar Educational Institution vs ACIT 224 ITR 310. 11. We have heard the rival submissions and carefully perused the relevant material placed on record, inter alia, impugned order of CIT(A) and judgment/orders relied by both the parties. At the .....

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ects and genuineness of the trust or institution, CIT will pass an order granting registration u/s 12AA of the Act. It is further provided that if the CIT is not so satisfied, the provisions of section 12AA of the Act require him to pass an order rejecting such application of registration and section 12AA of the Act prescribes and provides the scope and ambit of the inquiry that the commissioner is authorised to carry out at the time of grant of registration u/s 12AA of the Act to a Trust or ins .....

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e 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 o .....

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purpose other than the aims and objects of the trust. From the impugned order, we further note that it is not the allegation of the CIT that the fees charged from the institutions or donations received have been used for the purposes other than running the institution managed by the assessee trust. Admittedly and undisputedly, this fact has been noted by the CIT that the appellant trust is running a school as per its charitable objects and it is not the allegation of the CIT that the activities .....

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view of the decision of Hon ble Karnataka High Court in the case of Sanjeevamma Hanumath Gowda Charitable Trust vs DIT(E) (supra), we are of the considered opinion that the ld. CIT was not justified in rejecting the application of the assessee for grant of registration u/s 12A of the Act as he considered irrelevant facts and material while rejecting the application of the assessee. Finally, we are of the considered view that as per objects of the applicant trust, if only one activity of running .....

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of charitable activity as per trust deed. The CIT has not demolished this contention of the applicant that the trust is charging reasonable fees from students and it also gives concession from time to time to the poor and more deserving students. At the time of grant of registration, the CIT is not required to act as the Assessing Officer, especially when the concerned Assessing Officer has passed an assessment order u/s 143(3) of the Act for assessment year 2012-13. 14. On this issue, it is re .....

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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 b .....

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