TMI Blog2015 (8) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... objects of the trust being charitable and the activities being genuine. It is not the stage in which the learned Commissioner of Income Tax should be commenting on the taxability of the assessee. That stage comes later while making the assessment. In the present case, nowhere in the whole order the learned Commissioner of Income Tax has been able to comment on the objects of the society being not charitable. On perusal of the memorandum of the society even, we do not find any of its objects being not charitable. None of the activities taken by the assessee was held to be not genuine also. In the absence of any such finding, the learned Commissioner of Income Tax cannot reject the application of the assessee. - Decided in favour of assesssee - IT Appeal No. 1040 (Chd.) of 2014 - - - Dated:- 20-8-2015 - H. L. Karwa (Vice-President) And Rano Jain (Accountant Member) For the Appellant : Tej Mohan Singh For the Respondent : Sunil Verma, DR ORDER Rano Jain (Accountant Member) This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax, Panchkula dated 27.10.2014 passed under section 12AA of the Income Tax Act, 1961 (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he society which are charitable in nature. (iii) The building in question, on which the society is functioning/running, has no lien with the society. (iv) As per Memorandum of Article of the society, most of the member/office bearers are from Chadha family and are relatives of each other and descendants of the same saint. (v) No documentary evidence produced regarding receipt of donation whether the same is received towards corpus fund or voluntary contribution. (vi) One of the amended objects of the society shows that the object of the society is the furtherance of the cause of a particular/specific sect or biradari of Bhai Mansa Singh Ji as per point (iv) of aims and objects Supra which reads as under:- 'To run the society for benefit of poor general public at large to provide Medical Aid, Education Institutions, scholarships, sports, blood Donation Camps, Other facilities Activities on the teachings of Bhai Mansa Singh Ji'. 4. The learned Commissioner of Income Tax was of the view that the above said reasons were against the spirit of section 13(1)(b) of the Act and hence, the application for registration was rejected. 5. Now the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of cost, besides providing its other premises to hold various social and charitable activities. As such, the society does not need a place by way of land and building. This submission was also made before the learned Commissioner of Income Tax. As regards point No.(iv) that most of the members and office bearers are from Chadha family and are related to each other, it was submitted that founder members of the society are descendants of Bhai Mansa Singh Ji. Though they all have their surnames as Chadha but they are not related to each other closely. Regarding point No.(v) that no documentary evidence for donation was produced. Our attention was invited to the reply filed before the learned Commissioner of Income Tax, which was quoted at page 6 of the order of the learned Commissioner of Income Tax, whereby it has specifically been mentioned that the documentary evidences of the same were filed before the learned Commissioner of Income Tax. The last reason given by the learned Commissioner of Income Tax for rejection of the application was that the one of the amended objects of the society shows that the object of the society is the furtherance of the cause of a particular sect or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r registration under section 12AA deals with the existing activities or the activities, which are to be taken in future. If the assessee does not satisfy the test of genuineness of activities at any subsequent stage, the registration itself can be cancelled in terms of sub-section (3) of section 12AA of the Act. Therefore, the genuineness of the activities of the assessee cannot be pre-judged only for the reason the activities having not been undertaken. This view also gets strengthen by the judgment of the Hon'ble Delhi High Court in the case of DIT v. Foundation of Opthalmic and Optometry Research Education Centre [2013] 355 ITR 361/[2012] 210 Taxman 36/25 taxmann.com 376 whereby it has been held that while examining the application under section 12AA of the Act, the concerned Commissioner is not required to examine the question whether the trust has actually commenced and carried on its charitable activities. Similar proposition was held by the Hon'ble Karnataka High Court in the case of DIT (Exemption) v. Meenakshi Amma Endowment Trust [2013] 354 ITR 219/40 taxmann.com 30/219 Taxman 136 (Mag.). 9. As regards the question of building and members/office bearers being f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 280/[2011] 15 taxmann.com 123/203 Taxman 53, whereby the Hon'ble Court observes as under : 'As per s. 12AA, an application for registration of the trust and institution is required to be made within one year from the date of creation of the trust or the establishment of such institution. The procedure for registration of the trust or institution is prescribed under s. 12AA. In terms of cl. (a) of s.12AA, the CIT is to satisfy himself about the genuineness of the activities of the Trust on such inquiries as he may deem necessary. Sub-ss. (1A) and (2) of s. 12AA, are procedural in nature, whereas Sub-s. (3) of s. 12AA, empowers the CIT to cancel the registration of the Trust or Institution, if he is satisfied that the activities of such Trust or Institution are not genuine or are not carried out in accordance with the objects of the trust or institution. Therefore, the object of s. 12AA, is to examine the genuineness of the objects of the trust, but not the income of the trust for charitable or religious purposes, The stage for application of income is yet to arrive i.e. when such trust or institution files its return.' In another later judgment of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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