TMI Blog2018 (5) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... edings u/s 12AA of the Income Tax Act, 1961; in short the Act . We have heard both the parties. Case file perused. 2. We find at the outset that there is no dispute in CIT(E) s order that he rejects assessee s registration only on the ground thatits charitable activities are yet to commence. The assessee came into existence as a trust on 28.07.2016. It filed for its impugned registration on 07.11.2016 as a charitable institution. The CIT(E) quotes hon'ble Kerala high court s decision in (2001) 247 ITR 18 (Ker) Self Employers Service Society vs. CIT rejecting the concerned assessee s registration on the ground that it had not started its charitable activities. Learned Departmental Representative strongly supports the CIT(E) order s under challenge during the course of hearing. We find no merit in Revenue s instant argument. A co-ordinate bench in Vidyadayani Shiksha Samiti vs. CIT(Exemption) ITA No.309/Del/2016 decided on 14.12.2017 has rejects Revenue s identical contention as follows:- 9. Ld. DR on the other hand strongly supported the order of the ld. CIT. He submitted that the ld. CIT has got ample power u/s 12AA to examine the books of account of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (x) To establish and maintain charitable hospitals, public health centre, and social up-lift centres. 12. Since the assessee trust did not produce the books and vouchers in respect of expenses claimed by the society for verification of the activities of the trust, the ld. CIT held that the assessee trust is not carrying out any charitable activities and, therefore, the genuineness of the activities could not be verified. Relying on various decisions, the ld. CIT rejected the claim of registration sought by the society u/s 12A(1) of the I.T. Act. It is the submission of the ld. counsel for the assessee that at the time of granting of registration the ld. CIT is required only to examine the objects of the trust and is not required to examine the books of account of the trust and it is only during the claim of exemption u/s 11 the Assessing Officer will examine the same and allow or disallow the same as the case may be. It is also his submission that since the assessee trust is imparting education by running various schools and colleges, therefore, it is doing charitable activities as according to him education per se is charitable activity. 13. We find merit in the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtisement and publicity is unwarranted and against the settled interpretation of the statute. Before concluding we also take notice that the ld CIT has relied on the judgment of Hon ble High Court of Uttarakhand in the case of CIT Vs. Queen Educational Society, which is not applicable to the facts of the present case, for the reason that the examination at the stage of registration is to be confined to the objects and moreover as held by the Apex Court in American Hotel Lodging Association Educational Institute (supra) the character of the recipient of the income must have the character of educational institution is to be determined irrespective of the profits. In view of the above we reverse the order of the CIT and direct it to grant registration u/s 12A of the Act. 15. The various other decisions relied on by the ld. counsel for the assessee in the Paper Book also supports the view that education per se is a charitable activity. 16. Now, coming to the powers of the Commissioner as to whether while granting registration u/s 12A he is required to examine the books of account etc. or he is only to satisfy himself regarding the objects of the trust and genuineness of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the trust. 3. It is evident that, at this stage, the Commissioner is not to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of Section 12A read with Rule 17A and whether Form No. 10A has been properly filled up. He may also see whether the objects of the trust are charitable or not. At this stage, it is not proper to examine the application of income. 4. The order impugned does not say that the objects of the society are not charitable in nature; it merely says that they are general in nature. Just because they are general, they do not cease to be charitable. The Commissioner has also observed that no activity has been carried on by the society. It is also not the requirement of Section 12A of the Act. Nor has Section 80G any relevance at this stage. The impugned order cannot, therefore, be sustained and it is quashed. 18. We find the Hon ble Karnataka High Court in the case of A.S. Kupparaji Brothers Charitable Foundation Trust (supra) has observed as under :- The certificate of registration is only an enabling provision to claim exemption. By merely granting a certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication is made in accordance with s. 12A r/w r. 17A and whether Form No.10A has been properly filled up. He may also examine whether objects of the trust are charitable or not. Sec. 12AA nowhere provides that CIT while considering the application for registration is also required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit. The language employed by the legislature in s. 12AA only requires that activities of the trust or institution must be genuine which should be in consonance with the object of the trust. At this stage, the CIT is not required to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of s. 12A r/w r. 17A and whether Form No.10A has been properly filled up. He has also to see whether the objects of the trust are charitable or not. Our view funds support from the Division Bench decision of the Allahabad High Court rendered in the case of Red Rose School (supra) and the decisions in the case of New Life in Christ Evangelistic Association (supra), Fifth Generation Education Society (supra) and Shantagauri Ramniklal Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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