TMI Blog2022 (2) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... 2AA. From conjoint reading of the aforesaid clauses of the Trust Deed, it is axiomatic that primary purpose / objects of the assessee enumerated in the Trust Deed are charitable in nature. The other clauses of the Trust Deed had to be necessarily read in the context of the aforesaid clauses. The Tribunal, after taking into account the relevant clauses of the Trust Deed has recorded a finding of fact that the primary object of the Trust is charitable in nature. Even otherwise, the activities of the assessee as set out in the Trust Deed are covered within the ambit of charitable purpose being primarily for education. The aforesaid finding by the Tribunal has not been assailed as perverse in this appeal. Therefore, the issue with regard to the activity of the assessee being commercial or business in nature, cannot be gone into at the time of consideration of the application under Section 12AA of the Act. Even otherwise, at the time of grant of registration the Commissioner of Income Tax, in the facts of the case could not have examined the genuineness of the activities of the assessee as its activity had not commenced. The issue regarding the satisfaction of genuineness of activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Ganjam Nagappa Son Trust (supra). Wherein, it has been held that grant of exemption or renewal is not automatic in character , in allowing the assessee's appeal? 2. Facts leading to filing of this appeal in a nutshell are that pursuant to a registered deed of trust dated 21.02.2018, the assessee came into existence. The assessee filed an application for registration under Section 12AA of the Act on 20.03.2018 and also filed an application seeking approval under Section 80G(5)(vi) of the Act. The Commissioner of Income Tax, by an order dated 18.09.2018, rejected the application inter alia on the ground that primary object of the assessee is erection, construction and maintenance of townships and housing which is commercial in nature and not charitable in nature. It was further held that clause 3(v) of the Trust Deed promotes industrial and commercial activities and is therefore not charitable in nature. It was also held that clause 5 of the Trust Deed gives an absolute discretion to the trustees to sell and convert trust funds and properties into other properties. 3. The assessee thereupon filed an appeal before the Tribunal. The Tribunal, by an order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r object of general public utility. It is further submitted that since the activities of the Trust have not yet commenced, therefore, no inference with regard to its nature of activity can be drawn. It is also urged that at the time of registration of the Trust, the Commissioner should not go into the genuineness of its activity. It is also pointed out that decision of the Supreme Court in SOLE TRUSTEE, LOK SHIKSHANA TRUST, supra is no longer a good law. In support of aforesaid submission, reliance has been placed on the decisions in 'ADDITIONAL COMMISSIONER OF INCOME TAX Vs. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION' (1979) 2 Taxman 501 (SC), 'SUDARSHAN SILK AND SAREES Vs. COMMISSIONER OF INCOME TAX' (2008) 161 Taxman 321 (SC), 'DIRECTOR OF INCOME TAX Vs. GARDEN CITY EDUCATIONAL TRUST' (2010) 191 Taxman 238 (KAR) AND 'ANANDA SOCIAL AND EDUCATIONAL TRUST Vs. COMMISSIONER OF INCOME TAX' (2020) 114 Taxmann.com 693 (SC). 6. We have considered the submissions made by the learned counsel for the parties and have perused the record. The Act provides for exemption of income of charitable institutions under Section 11 of the Act. Section 2 ..... 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Clauses 2, 2(b), 3(1) and 3(2), 5, 6, 11, 13 and 8 of the Trust Deed are reproduced below for the facility of reference: 2. xxxxx (b) Subject to the provisions of sub clause (a) of clause 2, the Trustees shall hold the Trust Funds upon Trust so that as far as practicable the corpus shall always remain intact and only the income thereon shall be used, but with liberty to the Trustees at their discretion to use the corpus from time to time either wholly or in part or parts on such public educational purposes including (i) Spiritual activities which are beyond any specific religion; (ii) Research in the region of raising human consciousness and such practices as to aid such activities; (iii) Well being, welfare, recreation and education of children and adults, mentally retraded, normal, invalid, or handicapped; (iv) Research in the region of collective and community living in harmony, unity and peace and growth of human consciousness to higher levels of spirituality; (v) Any purpose that the law and the provisions of the Income Tax Act, 1961 regard as educational purpose; and in such manner as the Trustees may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r spiritual pursuits, for a life in harmony, peace, and unity and for achieving a growth of consciousness towards divine, and contribute towards maintenance and support of the inmates of such centres, to assist such activities and provide, meditation halls, reading rooms, libraries, homes, gardens, nurseries, furnishings, equipment yoga centres for development of health, hygiene and body and in general to provide for facilities and physical needs of such life, to provide for publications, printing facilities, or contribute towards publication expenses of such activities, and to aid in general any individual institution, or organization, or group of individuals, promoting or aiding or assisting others, to lead aforesaid community life leading towards higher goals of spirituality, human consciousness, unity, harmony and peace; XXX (v) To assist, to establish, to promote any industrial and commercial activity or activities, whose entire proceeds are utilized for supporting for the benefit of activities in 3(i) and 3(ii) (vi) To establish, erect, equip and maintain or contribute towards establishment, erection equipment and maintenance of colleges, schools, kalamandirs, ..... 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