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TMI Blog2018 (5) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee. By not allowing him to examine the books of account and thereby restricting his powers is contrary to the provisions of the Act. He submitted that ld. CIT has thoroughly discussed the issue by relying on various decisions which are applicable to the facts of the present case. He also relied on the decision of the Hon'ble Bombay High Court in the case of Blue Star Ltd. vs. CIT reported in 217 ITR 514. 10. Ld. counsel for the assessee, in his rejoinder, submitted that the decision relied on by the ld. DR in the case of Blue Star Ltd. (supra) is not applicable to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 above submission of the ld. counsel for the assessee. So far as whether education per se is charitable or not, we find the Delhi Bench of the Tribunal in the case of Shavak Shiksha Samiti (supra) at para 3 has observed as under :- "3. We have considered the facts of the case and rival submissions. Section 2(15) defines the term 'charitable purpose' in an inclusive manner and includes within its ambit relief of poor, education, medical relief and advancement of any other object of general public utility. While, there could be some dispute in interpretation of the words "any other object of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution 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 the activities of the trust, we find various courts have held that while granting registration u/s 12A the ld. CIT is required to see only the objects of the assessee trust/society and not to examine the application of income. He is not required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit while granting registration. He is only required to examine the objects of the trust. We find identical issue had come up before the Tribunal in the case of Bhartiya Kisan Sangh Sewa Niketan (supra). In the said case also the assessee trust did not produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 certificate income is not exempted. That is only a first stage to claim exemption. The Commissioner of Appeals should not have confused these two aspects and seems to think as the trustees and his family members are treating the property as their own and misutilising the property it is not a genuine trust. When once it is admitted that in pursuance of the trust deed and in terms of the objects set out therein, schools and colleges are being run and educational institutions are being run as rightly held by the Tribunal, nothing more requires to be established to show that the trust in question is a genuine trust and therefore, the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication 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 Trust (supra). 9. In the backdrop of aforesaid legal position facts of the case may be seen. Admittedly the application submitted by the respondent was in consonance with the procedural requirement prescribed in this regard. From the trust deed which was filed before the CIT the objects of the trust could be ascertained. From perusal of cl. (3) of the trust deed we find that the objects of the trust are charitable in nature and are in tune with s. 2(15) of the Act and, therefore, the Tribunal rightly opined that the order of the CIT rejecting the application under s. 12A was unjustified." 20. The various other decisions relied on by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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