TMI Blog2017 (11) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. - Decided in favour of assessee. - I.T.A Nos.1340&1341/Kol/2017 - - - Dated:- 17-11-2017 - Sri N. V. Vasudevan, JM And Shri Waseem Ahmed, AM For the Appellant : Shri S.M.Surana, AR For the Respondent : Shri G.Mallikarjuna, CIT(DR) ORDER Per N. V. Vasudevan, JM ITA No.1340/Kol/2017 is an appeal filed by the Assessee against the order dated.25.05.2017 of. C.I.T (Exemption), Kolkata rejecting the application for grant of registration made by the assessee u/s 12AA of the Income Tax Act, 1961. ITA No.1341/Kol/2017 is an appeal filed by the Assessee against the order dated.25.05.2017 of. C.I.T (Exemption), Kolkata rejecting the application for grant of approval of the assessee u/s 80G of the Income Tax Act, 1961. 2. The Assessee is a Society registered under the West Bengal Society Registration Act, 1961. A certificate of Registration of Societies granted by the Registrar of Societies, WB, is at page 29 of the paper book and is dated 29.09.2016. The objects for which the assessee was established as per the Memorandum of Association of the Society are as follows :- a) To acquire, establish, start, aid, run, maintain or manage educational in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant of registration u/s 12AA of the Act and also for grant of registration u/s 12AA of the Act and also for grant of approval u/s 80G of the Act on 04.01.2017. As far as registration u/s 12AA of the Act is concerned the requirements for grant of registration u/s 12AA of the Act are that the Commissioner granting registration should be satisfied about the charitable nature of the objects of the trust or institution and the genuineness of the activities of the trust or other charitable institution applying for grant of registration. As far as grant of approval u/s 80G of the Act is concerned one of the requirements of Rule 11AA of the Rules is that it should have been granted registration u/s 12AA of the Act. 4. The CIT(Exemption), Kolkata on going through the application for grant of registration u/s 12AA of the Act noticed that after getting the registration under the Societies Registration Act on 29.09.2016, the assessee started its charitable activities and had incurred expenses by providing medical facilities and paying fees to the doctors, giving medicines and providing spectacles. The AO noticed that payment to the doctors and staff, incurring of medical expenses as also pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er referring to the aforesaid decision held as follows :- Therefore, it is abundantly clear that a trust or institution which is yet to start any activities or fails to furnish substantial proof cannot be granted registration u/s 12AA(1). In course of proceeding I was driven to the conclusion that in absence of proof of activity, registration u/s 12AA cannot be granted. Therefore the application for grant of registration u/s 12AA is hereby REJECTED on merit. 6. As far as application of grant of approval u/s 80G of the Act is concerned the CIT(E) refused to grant approval and registration u/s 12AA have been rejected. 7. Aggrieved by the aforesaid orders of CIT(A) the assessee has preferred the present appeals before the Tribunal. 8. We have heard the rival submissions. As far as grant of registration u/s 12AA of the Act is concerned, it is clear from the order of CIT(E) that the only reason given by him for rejecting the assessee s application for grant of registration u/s 12AA of the Act is that the trust or institution which is yet to start any charitable activity cannot be granted registration u/s 12AA of the Act on the basis of its objects which are charit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts which have been relied upon in a judgment of a Division Bench in Hardayal Charitable Educational Trust v . CIT: [2013] 355 ITR 534/214 Taxman 655/32 taxmann.com 341 (All.) While following the view which was taken by the High Courts of Karnataka, Delhi and Punjab and Haryana, the Division Bench has held as follows: The preponderance of the judicial opinion of all the High Courts including this court is that at the time of registration under section 12AA of the Income-tax Act, which is necessary for claiming exemption under sections 11 and 12 of the Act, the Commissioner of Income-tax is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust set up to achieve its objects of establishing educational institution, is in the process of establishing such institutions, and receives donations, the registration under section 12AA cannot be refused on the ground that the trust has not yet commenced the charitable or religious activity. Any enquiry of the nature would amount to putting the cart before the horse. At this stage, only the genuineness of the objects has to be tested and not the activities, which have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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