TMI Blog2020 (3) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... only, before the Commissioner. Secondly, the other situation where the trustees carry on activities for sometime and then apply for registration. In that case, the genuineness of the objects as well as the genuineness of its activities have to be proved to the Commissioner. In the second situation, practically speaking, any activity of the trust carried out without registration and without any tax benefit would likely to be insignificant. Every word in a statute has meaning and application. The legislature does not waste words. Nor does it indulge in surplussage. Hence, every word in Section 12AA has to be given its meaning and effect. In my opinion, when the statute refers to the objects of the trust and the genuineness of its activitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be one which perhaps defeats Section 12A/12AA of the said Act of 1961 and its very purpose and, therefore, also it cannot be accepted. -Decided in favour of assessee - ITA 180 of 2018 - - - Dated:- 28-2-2020 - Hon ble Justice I. P. Mukerji And Hon ble Justice Protik Prakash Banerjee For the Appellant : Mr. S. N. Dutta, Advocate For the Respondent : Mr. Malay Dhar, Mr. Bhaskar Sengupta, Mr. Biswajit Sarkar, Advocates ORDER I. P. MUKERJI, J. On 10th January, 2019 a division bench of this court admitted this appeal to be heard on the following substantial question of law: Whether the Income Tax Appellate Tribunal erred in law by misinterpreting Section 12AA of the Income Tax Act, 1961 and came to an errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 23, 2008, and within a period of nine months they had filed an application under section 12A for issuance of the registration claiming exemption. The fact that the corpus of the trust is nothing but the contribution of ₹ 1,000 by each of the trustees as corpus fund goes to show that the trustees were contributing the funds by themselves in a humble way and were intending to commence charitable activities. It is not even the case of the Revenue that by the time the application of the assessee came to be considered by them, the assessee had collected lots of donations for the activities of the trust. On the other hand, the grievance of the concerned authorities seems to be that there was no activity which could be termed as chari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner from registering a trust solely based on its objects, without any activity, in the case of a newly registered trust. The statute does not prescribe a waiting period, for a trust to qualify itself for registration. A division bench of the Allahabad High Court following the above Karnataka High Court decision in Hardayal Charitable and Educational Trust Vs. Commissioner of Income-Tax reported in (2013) 355 ITR 534 (Allahabad) expressed a similar view 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of time had not done any charitable work and could not show any genuine activity supported the decision for rejection of registration. While we substantially agree with the ratio in the above cases, we cannot help making some observations. Section 12A(1) of the said Act states that the provisions for tax benefit under Sections 11 and 12 would only apply to any trust if the trust is registered under Section 12AA. Therefore, a trust on registration gets very substantial tax benefits. A trust on formation normally looks towards donors to augment its corpus. The donor also gets corresponding tax benefits, only if the trust is registered. Take for example, the donation referred to in Section 80G(5) read with Section 10(23C)(v) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to see that the constitution of the trust, its objects, its trustees and proposed activities are prima facie genuine. On that basis he has to consider registering the trust. If the activities are found not to be genuine at a later point of time, he always has the option of cancelling its registration under Section 12AA(3) of the said Act. I am of the opinion that the tribunal has appreciated the law correctly. The question in this appeal is answered in the negative, against the Revenue and for the assessee. The appeal (ITA 180 of 2018) is accordingly dismissed. (I. P. MUKERJI, J.) PROTIK PRAKASH BANERJEE, J.: I have had the opportunity to go through the judgment of my Learned Brother and I concur fully with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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