TMI Blog2020 (3) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(E) founds that the application has been properly made and the objects of the Trust are charitable in nature as per the provisions of Income Tax Act then the assessee should not be denied the registration u/s 12AA of the Act. However, in case the activities of the trust or the institution are being carried out in a manner that the provision of section 11 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then the Pr. Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution, as provided in sub-section (4) of section 12AA of the Act unless it is proved that there was a reasonable cause for the activities to be carried out in the said manner. We direct the Ld. CIT(E) to grant registration u/s 12AA of the Act to the assessee. As regards granting of approval u/s 80G(5)(vi) of the Act, the issue is restored to the file of Ld. CIT(E) for reconsideration - Decided in favour of assessee. - ITA Nos.470 And 471/Ind/2018 - - - Dated:- 23-1-2020 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly commenced and has, in fact, carried on charitable activities. It was held that the statute does not prohibit the commissioner from registering the Trust solely based on its objects, without any activity and that the court or tax authority ought not to impose restriction which have not contained in the statute. Reliance is placed by the Madras High Court in DIT vs. Sreevi Samaj Tambaram Trust 92014) 362 ITR 199/222 Taxman 252/43 taxmann.com 142(Mad.) Reliance is also placed on the decision of the Karnataka High Court in DIT (E) v. Meenakshi Amma Endowment Trust (2013) 354 ITR 219/219 Taxman 136(mag.)/40 Taxmann.com 30(Kar.) to contend that the objects of the Trust as contained in the Trust deed have to be taken into consideration by the authority while considering an application for registration. Also held by Hon'ble I.T.A.T., Indore Bench in case of Divine Siksha Samiti (ITANo.1034/Ind/2016 that section 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 purpose. Relying on D.P.R. Charitable Trust (2011) 61 DTR 410(M.P.) 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y gifts, donation or otherwise institutions for the advancements of learing such as libraries, pathshalas, gurukuls, fine art institutions, art galaries industrial technical or-commercial classes or institutions and for the advancements of training such and gymnasiums and other institutions. (e) To assist, finance, support, establish takeover and/or maintain any institution meant for the relief of the poor and advancement of any other objects of general public utility. (f) To give and accept donations, subscriptions or contributions to any other charitable or public trust or institutions or organizations in conformity with the objects of the trust. 10. The ld. CIT(E) rejected assessee s application u/s 12AA 80G(5)(vi) of the Act mainly for the reason that assessee trust being newly incorporated and no charitable activities was carried out so far during the time of filing the application. 11. Now the issue before us is that whether a trust or a charitable organization is mandatorily required to perform charitable activities as per trust deed before proceeding to file an application for registration u/s 12AA or u/s 80G(5)(vi) of the Act . 12. We observe that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. Sec. 12AA which was inserted by the Finance Act, 1996 w.e.f. 1st April, 1997 reads as under : 12AA. Procedure for registration. (1) The CIT on receipt of an application for registration of a trust or institution made under cl. (a) or cl. (aa) of sub-s. (1) of s. 12A, 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 inquires 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 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-cl. (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may examine is whether the application is made in accordance with the requirements of s. 12A r/w r. 17A and whether From No. 10A has been properly filled up. He has also to see whether the objects of the trust are charitable or not. Our view finds 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 cases 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. 10. For the aforementioned reasons, the substantial question of the law f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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