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2016 (4) TMI 166 - ITAT DELHI

2016 (4) TMI 166 - ITAT DELHI - TMI - Registration u/s 12A and approval u/s 80G denied - appellant trust has carried out one time activity of the distribution of sums - Held that:- From the impugned order of the ld. CIT we note that in the ground taken for rejection he observed that the appellant trust has carried out one time activity of the distribution of sums and the applicant society has not carried out any activity in the field of formal education. He further alleged that the distribution .....

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he applicant must show and establish having undertaken charitable activities before filing such application for registration u/s 12A of the Act. The ld. CIT(A) has not brought out any allegation or fact on record to establish and allege that the receipts of application trust were not used for charitable purposes and nor it has been shown that receipts were misappropriated or misused by the trustees or office bearers of the trust. Hence this allegation has no legs to stand.

No clause o .....

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ce, caste, sex or place of birth and operation of the trust shall be carried in accordance with the intention of earning profits will perform with service motive only. In such situation the basis and allegations labelled by the ACIT are not found to be sustainable. registration u/s 12AA to be allowed - Decided in favour of assessee - ITA No. 3766 & 3767/Del/2013 - Dated:- 31-3-2016 - Shri G. D. Agrawal, Vice President And Shri Chandra Mohan Garg, Judicial Member For the Petitioner : Shri R.P. Ba .....

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olve identical issues. Hence these are being disposed of by this common order for the sake of brevity and convenience. ITA No. 3766/Del/2013 2. At the very outset, it is relevant and necessary to record relevant facts of the case that the applicant-trust was registered under the Indian Trusts Act vide Trust deed executed on 27.11.2010. As per the applicant-trust, it is a charitable trust established with the object of spreading education and providing medical and social relief to the poor. Earli .....

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to whether the applicant fulfilled all the conditions required for grant of registration applied for and the report was received through the JCIT, Sonepat vide his office letter dated 18.2.2013. During the remand proceedings, the applicant-trust submitted that further information and explanation to the JCIT as well as the AO did not clearly recommend the case for grant of registration u/s 12A of the Act and left the matter to be decided by the ld. CIT, Rohtak on merits. The ld. CIT, in the impu .....

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application for registration under section 12AA of the income tax act, 1961 without giving appropriate opportunity and ignoring all merits of the case. In fact the Ld. CIT did not give any hearing on the matter and left it on the Ld. ITO Hq. (vig), Rohtak. 3. We have heard the arguments of both the sides and carefully perused the relevant material placed on record before us. The ld. AR submitted that the ld. CIT(A) has wrongly dismissed the application for registration u/s 12A of the Act withou .....

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contended that the ld. CIT failed to appreciate that the applicant-trust has applied for registration u/s 12A in the prescribed form No. 10A alongwith requisite documents including the trust deed, but the ld. CIT has wrongly concluded that the activities of the trust cannot be put to the test of genuineness without going into the merits. The ld. AR contended that the ld. CIT has ignored the fact that the applicant-trust exists only for charitable purposes and not for profit motive, as is clearly .....

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6.2012, which was actually passed on 5.4.2013. The ld. AR lastly contended that the ld. CIT, Rohtak rejected the application for registration by considering the irrelevant facts and on incorrect basis. Therefore, the applicant-trust should be granted deemed registration. 4. Replying to the above, the ld. DR contended that as per the directions of the Tribunal, the ld. CIT, Rohtak properly asked for remand report from the AO and after considering the same, held that the JCIT as well as the co did .....

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n towards para 5 of the Tribunal order and submitted that in pursuance of direction of the Tribunal, the ld. CIT(A) properly conducted second round of proceedings and dismissed the application for registration u/s 12A of the Act. 5. On careful consideration of the above noted discussion, we note that the Tribunal directed the ld. CIT to decide afresh the issue of grant of registration u/s 12A of the Act and grant of approval u/s 80G of the Act by observing as under: 5. We have heard rival conten .....

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rd and affording opportunity of being heard to the applicant on alleged non compliance. In the interest of natural justice we deem it fit and proper to restore the issues in question i.e. registration u/s 12AA/80G, back to the file of CIT for decision afresh on merit in accordance with law, after affording reasonable opportunity of being heard to the appellant. We order accordingly. 6. From the vigilant perusal of the relevant material on record, we note that the ld. CIT has rejected the applica .....

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trolled by the President, Secretary, First Vicepresident, Second Vice-President and Treasurer of the Society who are brother having close family relations with other members. iii) That the appellant society has amended the constitution without following the due procedure of the law. iv) The Joint CIT as well as Assessing Officer did not recommend the case under registration 12A and left the matter to be decided on merits. v) The properties of the society and the financial control are in the hand .....

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e bench of ITAT, Ahmadabad in the case of Jupiter Medical Research Centre Trust Vs. CIT 128 TTJ [Ahd] UO 118, as relied by the ld. AR wherein it was held that merely because the trustees are of the same family, it does not put a rider or any adverse inference that the assessee applicant-trust is not for charitable purposes. 8. From the impugned order of the ld. CIT we note that in the ground taken for rejection he observed that the appellant trust has carried out one time activity of the distrib .....

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ause 10 and 12 clearly mandates the charitable activities of the trust. It is not pre-requirement for seeking registration u/s 12A of the Act that the applicant must show and establish having undertaken charitable activities before filing such application for registration u/s 12A of the Act. The ld. CIT(A) has not brought out any allegation or fact on record to establish and allege that the receipts of application trust were not used for charitable purposes and nor it has been shown that receipt .....

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ows that the control of properties and finance is safely given to members to enjoy the fruits of the properties and financial resources and receipts of the trust. 10. Per contra, from clause 16 of the trust deed it is clear that in the event of winding up of the trust or on any account whatsoever, the assets of the trust as at the time of wining up shall devolve upon any other charitable trust decided by the board of trustees. 11. Last allegation for rejection as noted by the ld. CIT(A) is also .....

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is clear that it was reported that the amount of ₹ 93,000/- has been utilised for the benefit of brilliant and needy students. In those reports the JCIT & ACIT/AO has also stated that the trust is running on deed which was made on 27.12.2010 and the trust is an educational and charitable trust with the object to help in spreading of education in its widest connotation with special focus on education of poor and needy without any preference on the basis of religion, race, caste, sex or .....

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e Commissioner shall call for documents, information and conduct inquiries to satisfy about the genuineness of the activities of the trust or institution and after recording satisfaction about the charitable or religious nature of the objects and genuineness of the trust or institution, CIT will pass an order granting registration u/s 12AA of the Act. 13. 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 s .....

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to take respectful cognizance of the judgment of Hon ble Karnataka High Court in the case of Sanjeevamma Hanumath Gowda Charitable 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 f .....

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r 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 .....

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