TMI Blog2016 (8) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... trust and after proper enquiry may grant registration. - ITA No. 165 And 166/Chd/2016 - - - Dated:- 11-8-2016 - SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Sh. Parikshit Aggarwal, CA For The Revenue : Sh. Sushil Kumar, CIT-II ORDER PER PRASHANT MAHARISHI, A. M. 1. These are the appeals filed by the assessee against the order of the ld CIT(Exemptions), Chandigarh dated 16.09.2015 for the Assessment year 2015-16 passed u/s 12A rejecting registration application of the trust and consequently also rejection application for recognition u/s 80 G( 5) of the act. 2. The assessee has raised the following grounds of appeal in ITA No. 166/Chd/2016 which is against rejection the application for registration u/s 12AA of the Income Tax Act :- 1. That on the facts, circumstances and legal position of the case and in law, the Worthy CIT has erred in passing that order in contravention of the provisions of Section 12AA of the Income Tax Act, 1961. 2. That on the facts, circumstances and legal position of the case and in law, the Worthv (TT has erred in rejecting the application of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd let or exchange all properties both moveable or immoveable, tangible or intangible construct, alter, maintain in good condition or develop all lands, houses/buildings, playgrounds as and when necessary. Clearly attract the provisions of section 13(1)(c) of the Act and the power of the Governing body lik, (iii) to invest tlie funds of society in (a) Moveable property (b) deposits in banks (c) Government securities or other public agencies (d) Shares of joint stock companies etc. ? or in any other securities/ funds as deemed fit and permitted by law in accordance with the section 11(5) of the Act, as investment of funds by the society is not allowed in shares of joint stock companies. 3. As per clause 7(iii) of the memorandum, the powers of the Chairman to incur expenditure up to ₹ 10,00,000/- without the approval of governing body till next meeting are very high and are liable to be misused as there is no time fixed for the meeting of Governing Body before AGM in the memorandum. It means the Chairman has power to utilise any funds upto ₹ 10,00,000/- for a period of one year without the approval of the governing body which clearly attracts the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. 68[(1A) All applications, pending before the 69[Principal Chief Commissioner or] Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the 69[Principal Commissioner or] Commissioner and the 69[Principal Commissioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) 70[or clause (aa) of sub-section (1)] of section 12A.] [Extracted from taxmann.com] 71[(3) Where a trust or an institution has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in charge of the properties of the trust. Monetary limit of the expenditure fixed for granting authority to the chief functionary is also for the better functioning of the assessee trust. Both the above conditions do not violate any of the provisions of section 11, 12 and 13 of the act applicable to the trust carrying on charitable activities as no direct or indirect benefit is conferred on the specified persons. Further, the funds of the trust shall always be invested in various securities, which are permitted by law. Apparently, the provision of section 11(5) specifies the permissible investment. At present trust has admittedly not invested in non specified investments. In case if subsequently any violation of those sections is found, the provision of section 11, 12 and 13 may accordingly apply to the trust. Further provision of section 11(4) gives ample power to the ld CIT (A) to withdraw the registration to the trust if any time it is found that there is violation of the objects of the trust or there is violation of the Income tax Act. Undisputedly, the activities of the assessee trust are eligible for registration. In our opinion rejection order passed by the Ld CIT (A) doe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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