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TMI Blog2010 (8) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... ic one, yet the administration of the trust had been left virtually to a single person i.e. Chairman. He further observed that Smt. Krishana Devi, wife of Shri Bahadur Singh is the settler of the trust as well as one of the trustees and the Chairman of the trust. The ld. CIT found that as per clause 20 of the trust deed, the properties of the trust shall vest in the Board of Trustees represented by chairman, and secretary shall be directed and guided by and responsible to the chairman as was provided in clause 21 of the trust deed. The learned CIT made reference to clause 13,14 and 18 with regard to the appointment of honorary secretary, an outsider as a whole time secretary on payment and honorary treasurer. He also made a reference to clause 18 stipulating that appointment of secretary as well as treasurer are not obligatory but optional as he found that the phrase "may be appointed" is used in clause 13,14 & 18 of the trust deed. He made a reference to clause 16 regarding operation of the bank account by any of the members of the board of trustees jointly and severally and as per resolution taken by Board of trustees, bank operation will be made with signatures of any of the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under scholarships, schools, hospitals, vocational institutes, boarding houses, welfare centers, convalescent homes, sanatoriums and auditoriums. In absence of the clear definition, the apprehension of the misuse of discretionary clauses e.g. "carrying out the objects of the trust …. in terms and conditions as the trustees deem fit and proper" increases. (ii) In respect of Mithoo Ram Chopra, the counterfoil of the receipt issued shows that a sum of ₹ 51,000/- was received from the donor; but the ledger shows that only a sum of ₹ 40,000/- have been accounted for. The counterfoils of the receipts issued to the 87 donors as given in the list referred to above reveal that the most of the donation is in cash and no PAN or other detail of the donors are mentioned in the receipts issued to them. This reveals that the books of the trust are not properly maintained and that the statement of accounts does not reflect the true state of affairs of the trust. (iii) The trust has received donation in kind i.e. a plot of land, but its area, situation, location, measurement and value has not been mentioned anywhere nor was given detailed address of the donor, which was nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents and reports were duly submitted and furnished to the department to show and establish that all the conditions requisite for grant of registration are satisfied in the present case. He further pointed out a report given by the AO i.e. Asstt. Commissioner of Incometax, Rewari to the CIT where the ACIT has stated that the assessee trust has been formed as a charitable trust and it is duly registered with sub Registrar and it has been engaged for last two years and in fact, it has utilized its receipts for object of the trust, namely, running of school, helping poor and needy people etc. The ACIT also reported that the trust has duly maintained all necessary books of accounts. He further pointed out that this report was forwarded by Addl. CIT to CIT with the observation that as the activity of the assessee trust is of charitable nature, and as per aims and objects of the trust, the registration was recommended. In support of the assessee's claim, the assessee has invited our attention to the provisions contained in Section 2(15) of the Act and certain decisions of the Tribunal as well of various High Courts. The learned counsel for the assessee has invited our attention to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions for registration of trust. A reading of the provisions of Section 12AA makes it clear that in order to grant registration to any trust, the CIT has to satisfy himself about the genuineness of the activities of the trust or institution or also about the objects of the trust or the institution. In order to satisfy himself about the genuineness of the activities of the trust, CIT can call for such documents or information from the trust as he thinks necessary and he is also empowered to make such enquiries, as he may deem necessary in this behalf. The objects of the trust can be seen from the byelaws or the deed of the trust, and unless the objects of the trust apparently make out that they are not in consonance with the public policy or that they are not the objects of any charitable purpose, registration cannot be refused on this ground. In the instant case, the learned CIT has himself made an observation that the object of the trust as per clause 5(i) to 5(xxvi) are prima facie grand and philanthropic one. He has merely objected to the administration of the trust being left virtually to a single person i.e. Smt. Krishna Devi, wife of Shri Bahadur Singh, Chairman of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are not relevant at the stage of grant of registration to the assessee trust when the object of the trust and genuineness of the activities of the trust are fully established with regard to the requirement or conditions enumerated in Section 12A of the Act. It is to be mentioned that mere because assessee had made a capital expenditure towards building that by itself, cannot be a ground to say that the assessee has not been carrying any charitable activity inasmuch as the building constructed is for the benefit of the object of the trust. With regard to the discrepancy as to the amount of donation received from Mithooram as pointed out by the learned CIT, we are of the view that this point cannot be a ground to reject the assessee's application for registration but should be left over to the AO to examine the same at the time of the making assessment as to whether the donation was given towards the object of the trust or not, or if there was any manipulation of the income of the trust not solely utilized for charitable purposes, and in that case, exemption to that extent of income may be disallowed while making the assessment in the light of the provisions contained in Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the trust from the date of the creation of the trust, if the Commissioner is, for the reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons, or otherwise from the first day of the financial year in which the application is made, if the Commissioner is not so satisfied. We, therefore, have to see as to whether assessee was prevented by sufficient reasons from making the application before the expiry of a period of one year from the date of creation of the trust i.e. within one year from 26.8.2004. In this respect, the assessee has submitted that the trustees were busy in setting up the project, collection of funds and other charitable activities and the matter with regard to making an application for registration u/s 12A had just slipped their mind and the delay was not intentional. 15. Having regard to the totality of the circumstances, we find that the assessee's application is delayed merely by about 10 months and that delay could be occurred due to trustees being preoccupied with other initial activities towards the object of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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