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2018 (3) TMI 219

ubmissions during the hearing - proof of charitable activities - Held that:- After receiving the Application for grant of registration u/s. 12AA in the prescribed Form, from the Assessee/trust, the Ld. CIT(E) has not proved with the evidences that the Assessee/Trust is not genuine and is not doing any charitable activity to achieve its objects. - At the time of granting the registration u/s. 12AA the Authority has to see or examine the genuineness of the activities of the trust or institution. Assessee has established that assessee is doing the genuine charitable activities to achieve the object of the Trust by making every possible efforts even by giving own rent free accommodation to the Trust. - Assessee is doing the charitable work to promote the awareness of universal teaching of SGGS (Shri Guru Granth Sahib) and other religious “Granths” among the 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 t .....

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rust were examined and it was found that the trust functions from the address T-40, 503, Lake View, Zion Apartment Faridabad, which apparently is the residence of President and Treasurer of the Trust. Most of the Capital Investment done in the case is at the residential premises. This fact corroborates the possibility that the trustees may be deriving benefit from the property of the Trust directly or indirectly. A write up was submitted wherein it was mentioned that the teaching of Shri Guru Granth Sahib are propagated through E-mail, Facebook and other online Social Networks. The proofs of online propagations have also been submitted. The Balance Sheet of the trust for 31.03.2014 as well as for 31.03.2015 has been filed by the assessee. From the perusal of details, Ld. CIT(E) noted that some amount of donations 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 th .....

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submissions during the hearing. However, on the contrary, Ld. Counsel of the assessee stated that the 2nd page of the trust deed as submitted by the assessee clearly and specifically mentions that the trust shall be styled as Religious and Educational Trust. He stated that Ld. CIT(E) has taken a very narrow approach of education as the term in itself has a very wide and broad meaning. Education does not only restrict to the teachings in schools, colleges and institutions. Teaching to general public without any discrimination as to religion, cast creed or gender and making people at large to understand the contents in our religious granths also comes within the ambit of education as has been well explained in the write up on activities undertaken by the trust. The aims and objects as mentioned in the trust deed 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. CI .....

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trust shall be open to all, irrespective of any cast, creed or religion and not only to one segment as has been judged by the Ld. CIT(E). We further note that Ld.CIT(E) in his impugned order vide para no. 2 has mentioned that the main object of the trust that has been mentioned is to promote awareness of universal teaching of SGGS (Shri Guru Grabnth Sahib) and other religious Granths among the general public and the younger generation , but Ld. CIT(E) has observed that that assessee is an educational and social welfare trust according to the write up submitted during the course of hearing. Hence, the Ld. CIT(E) observed that this is in contrast to the contents of the trust deed where it has been claimed to be a religious trust. However, we note from para no. 2 of the Trust Deed as submitted by the 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 .....

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jects of this Trust; (r) To enter into arrangements, amalgamation with any other association. institutions, societies or Trusts having similar objects of this Trust; (s) To borrow money or to receive deposits upon such terms and conditions as the Board shall deem necessary or expedient for achieving the objects of the Trust; (t) To maintain and run libraries particularly with respect to books on religion. 6.2 We further find that in the last 3-4 lines of paragraph-3 of the order dated 23-12-2015, the Ld. CIT(E) has mentioned that "Most of the capital Investment done in the case is at the residential premises. This fact corroborates the possibility that the trustees may be deriving benefit from the property of 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 activiti .....

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or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) of sub-section (1) of section I2A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass 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. (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 Co .....

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of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year. 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 th .....

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of the trust and as such, the scope of his powers was limited in this regard to make such enquiries as he deemed to, in respect of these two aspects. From the above cited cases and section(s) 12AA(3) & 12AA(4) it is very much clear that at the time of granting registration eligibility in terms of sections 10, 11 & 12 can't be verified as to whether or not what was practiced was indeed in deed of trust or not and asking for activities report at the time of granting registration is not warranted. These can be verified only at the time of assessment proceedings as per section(s) 12AA(3) & 12AA(4) after the registration has been granted and if the Ld. CIT(E) is satisfied 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 p .....

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