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2016 (2) TMI 746 - ITAT BANGALORE

2016 (2) TMI 746 - ITAT BANGALORE - TMI - Grant of registration u/s 12A and recognition u/s 80G denied - CIT(E) denied the registration only on the ground that the appellant-trust had not furnished the clarification as to receipt of rental income for conducting tuitions and the appellant-trust was not serious in prosecuting the applications - Held that:- The contentions of the ld.CIT(E) are not tenable in the facts of the present case as the appellant-trust had duly complied with all the letters .....

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se had clearly held that the question of verifying the activities of the trust can be considered only after it is registered and carries on activities subsequently.

Thus genuineness of the activities of the trust and nature of receipt of any sum of money cannot be gone into at the time of registration of the trust. It is only after the activities of the trust are commenced, the genuineness of the objects can be examined during the course of assessment proceedings, after the grant of r .....

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he Respondent : Shri Rajesh Kumar Jha, CIT(DR) Per INTURI RAMA RAO, AM : This appeal is filed by the appellant-trust directed against the order of the ld. Commissioner of Income-tax(Exemptions) [ CIT(E) for short] dated 31/07/2015 denying grant of registration u/s 12A of the IT Act, and recognition u/s 80G of the IT Act, 1961. 2. Briefly, the facts of the case are that the appellant-trust was formed on 24/07/1991 and it was duly registered with the Sub-registrar, Bangalore. The appellant trust w .....

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his purpose to start, establish conduct, maintain, manage, reading rooms, libraries, laboratories, gymnasiums, workshops, publishing houses, hostel residential quarters and the like. 3. To disseminate knowledge by publishing books, pamphlets and through lectures on Gandhian principles of truth non-violence and universal brotherhood. 4. To run night schools or to arrange to hold adult education class or physical training classes on such times or at such centres or at such time of the year as may .....

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. To print and publish and/or to exhibit any books, pamphlets or posters that may be considered desirable for the promotion of the objects of the trust. 9. To start and conduct magazines, periodicals and Newspapers and issue pamphlets to carry on educational propaganda and in furtherance of the aims and objects of the trust be means of lectures. 10.To do all such other lawful acts, deeds or other tings as are incidentals or conducive to the attainment of the above objects. 11.And generally on su .....

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istration of the Trust u/s 12A of the IT Act, 1961 and for approval u/s 80G of the IT Act, 1961 in Form No.10G vide application dated 28/01/2014 for grant of approval u/s 80G of the IT Act, 1961. The ld. CIT(E) vide his letters dated 16/04/2015, 29/06/2015 and 15/07/2015 sought certain information which has been duly complied with by the appellanttrust vide its letters dated 28/04/2015, 24/06/2015, 06/07/2015 and 15/07/2015. After perusing the information filed by the appellant-trust, the CIT(E) .....

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ant-trust is before us with the present appeals. 5. The ld.AR contended that the appellant-trust had complied with all the queries raised by the ld.CIT(E) and furnished all the details. In this connection, he has drawn our attention to the paper book wherein the copies of letters of correspondence with the ld.CIT(E) are placed. He further submitted that mere receipt of nominal rental income from the teachers who conducted the tuitions for students does not render the objects non-charitable. 6. O .....

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nd the appellant-trust was not serious in prosecuting the applications. In our considered opinion, the contentions of the ld.CIT(E) are not tenable in the facts of the present case as the appellant-trust had duly complied with all the letters issued by him and therefore, the ld.CIT(E) should not have held that the appellant-trust was not serious in prosecuting the applications. The receipt of rental income by the appellant-trust can be examined only during the course of assessment proceedings by .....

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n.) held as follows; 4. It is an undisputed fact that at the time of application for registration the respondent society had not commenced its activities and had not received the income. The question of verifying the genuineness of the activities of a trust can be considered only after it is registered and carries on the activities. It is settled law that in the first year when the trust is sought to be registered, it could not have carried out any activity, thus the question of verifying the ge .....

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of the activity by which the income is derived by the trust. 5. In the present case, the question is with regard to the registration of the trust in question wherein the objects have been clearly specified. The question of assessing the activities of the trust would arise only after the trust is registered and carries on the activities. At the time of initial registration, the same cannot be a question to be considered. In our view, the Tribunal has rightly allowed the appeal and directed the DI .....

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Education and Charitable Trust (2013) 355 ITR 280(P&H) and Allahabad High Court in the case of Fifth Generation Education Society Vs CIT 185 ITR 634 (All.) held as follows vide para-7 of the judgment. 7. The ratio that can be culled out from the above decisions is that the Commissioner is only entitled to examine whether the objects of the institutions are charitable or not. Once the objects of the institutions are found to be charitable, the Commissioner has no option, but to grant registra .....

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