TMI Blog2018 (3) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... e general public and in the younger generation, which is very much essential in these days for the betterment of the young generation. We further note that Assessee has filed sufficient evidences before the Ld. CIT(E) and before us for establishing the genuineness of the activity of the trust. Thus impugned order passed by the Ld. CIT(E), Chandigarh for not granting registration u/s. 12AA is not sustainable in the eyes of law - Decided in favour of assessee. - I.T.A. No. 1074/Del/2016 - - - Dated:- 1-3-2018 - Shri H. S. Sidhu, Judicial Member And Shri L. P. Sahu, Accountant Member Assessee by : Sh. A.S. Nagpal, Adv. Sh. Kunal Nagpal, Adv. Department by : Sh. Arun Kr. Yadav, Sr. DR ORDER Per H. S. Sidhu, JM This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Exemptions), Chandigarh dated 23.12.2015. 2. The assessee has raised following grounds:- 1. That having regard to the facts and circumstances of the case, Ld. CIT(E), Chandigarh, has erred in law and on facts in rejecting the application for registration of the appellant by holding that the objects of the appellant trust don t lend to the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations and subscriptions have been received which have been utilized for day to day expenses. The copies of the bank account furnished by the applicant has also been perused by him and it transpired that the payments have been made mostly for salaries, stationery, re- imbursement and payment to the charted accountant for preparation of the accounts. Ld. CIT(E) further observed that there is hardly any charitable expenses that are evident in the accounts. Some corpus donations have been received which have been accumulated. No evidence has been furnished about any specific instruction from the donors about the corpus donations being used only for specific charitable purposes. Further, apart from corpus donations most of the other receipts are in cash. The donations so received have been invested in FDRs reflected in the Balance Sheet. In the absence of any expressed intent to redeploy the interest earned on charitable work, one would tend to believe that the intent otherwise is to earn interest income from donations received. Ld. CIT(E) further noted that from the activities narrated and note on activities filed, it is clear that the applicant trust is a wholly trust which proposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself speaks of the fact that the same can only be achieved by the mode of educating the general public. In view of the above, he requested that the issue in dispute may be decided in favor of the assessee and Appeal filed by the Assessee may be allowed by allowing registration u/s. 12AA of the Act to the Assessee. 5.1 On the contrary, DR relied upon the orders of the Ld. CIT(E) and also relied upon the case laws as mentioned in the impugned order. Further, he strongly objected the request of the Ld. Counsel of the assessee and stated that asessee did not file any documentary evidence for substantiating its claim before the Ld. CIT(E), hence, he requested that Appeal of the assessee may be dismissed. 6. We have heard both the parties, perused and considered the relevant records available with us especially the impugned order passed by the Ld. CIT(E), the Paper Books filed by the Assessee s counsel i.e. containing pages 1 to 71 in which he has attached the copy of submission dated 08.11.2017; copy of Application in Form 10A for registration alongwith enclosures; copy of registered deed creating the assessee trust named Shabad Foundation dated 11.3.2014; copies of No objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee clearly and specifically mentions that the trust shall be styled as Religious and Educational Trust. The objects of the Trust are as under:- (a) To promote awareness of Universal teachings of SGGS (Shri Guru Granth Sahib) other religious Granths amongst the general public and in particular the younger generation; (b) To conduct or sponsor any type of exhibitions, symposiums etc. in the field of religious activities; (c) To provide facilities to promote awareness and facilitate attainment of expertise in religious education; (d) To provide low cost/free facilities to the weaker section to learn the meanings of religious Granths; (e) To print and publish literature, develop and create audio visual materials of importance to the public; (f) To establish, maintain, improve or manage and run existing or new college(s) for the training of teachers. (g) To associate with any other allied institution / groups that the Trustees may deem fit; (h) To arrange and promote the study of theory and practice of religious Granths in all its forms and variety' for knowledge and educational purposes; (i) To arrange for the writing, tape re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Trust directly or indirectly. However, the trust has not purchased any immovable property, hence the chance or any possibility of trustees may be driving benefits from the property of the trust directly or indirectly can't arise at all. Rather the building in question was purchased by Mrs. Ajit Kaur (one of the trustees) long back of the date of creation of the assessee trust and she has voluntarily provided. office space free of cost to the trust for its activities. Certified copies of the ownership papers of the building / NOC, which were submitted by the assessee along-with Form-10A, are enclosed at page nos. 10 to 12 of the paper book. 6.3 We further note that in the 11th to 14th lines of paragraph-4 of the order dated 23-12-2015, the Ld. CIT(E) has mentioned Some corpus donations have been received which have been accumulated. No evidence has been furnished about any specific instruction from the donors about the corpus donations being used only for specific charitable purpose . However, the Ld. CIT(E) checked / verified the entire books of accounts for the financial years 2013-14 2014-15 as produced by the assessee trust and the Ld. CIT(E) particularly checked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. (IA) All applications, pending before the 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 Principal Commissioner or Commissioner and the 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) or clause (aa) of sub-section (1)] of section I2A. (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section I2A as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996) and subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.7 We find that the expression general public utility has been well established from authoritative pronouncements from the Hon ble Supreme Court. The Hon ble Supreme Court in its significant decisions in the case of Ahmedabad Rana Caste Association Vs CIT 82 ITR 704 SC CIT Vs Andhra Chamber of Commerce 55 ITR 722 SC has held that an object beneficial to a section of public is an object of general public utility. It would be pertinent to quote the following from the said decisions of Hon ble Supreme Court: That the expression object of general public utility was not restricted to objects beneficial to the whole of mankind. An object beneficial to a section of the public was an object of general public utility. To serve as a charitable purpose, it was not necessary that the object should be to benefit the whole of mankind or even all persons living in a particular country or province. It was sufficient if the intention was to benefit a section of the public as distinguished from specified individuals , 6.8 We further note that the Hon ble High Court of Delhi in the case of Hamdard Laboratories India v. Assistant Director of Income-tax (Exemption) reported in [201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution. But in the instant case even the registration itself has not been granted despite of providing all the necessary documents prove the genuineness of activities actually being undertaken in accordance with the aims and objects of the trust as per the deed. 6.11 We further note that the Hon ble High Court of Punjab Haryana in the case of CIT vs. Baba Kartar Singh Dukki Educational Trust (2014) 221 Taxman 493 (P H) has held that 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 rejecting an application under Section 12A of the Act. However, in the present case the Ld. CIT(E) has not properly appreciated the aims and objects of the trust especially the object i.e. to promote awareness of univer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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