TMI Blog2022 (4) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... ther activities of the trust are charitable or not, he has to also verify the objects of the trust. The appellant before us is existing since 2001. However, as demonstrated in earlier paragraphs that though the appellant has earned substantial income, not a rupee has been spent on objects of the society. Rather, appellant is generating income with an intention to earn profit as is visible from the income expenditure account. Though the appellant claimed that it had carried out charitable activities like blood donation etc, no evidence has been filed to substantiate the claim. Also, the CIT(E) has not mentioned anything about the objects of the society. Further he has not given any reasoned findings whether the objects are charitable or not. During the registration proceedings u/s 12AA, the CIT(E) has to decide whether the objects are charitable or not as defined u/s 2(15) - we remand the matter back to the file of CIT(E) for reconsideration of the application filed by the assessee society U/s 12AA and pass an order afresh. The Appellant is also directed to file/produce all necessary documents as desired by CIT(E). CIT(E) shall afford reasonable opportunity of hearing to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA of the Act, the Commissioner has to only verify the objects of the trust. The CIT(E) is not empowered to verify the activities of the trust. Ld. AR invited our attention to the sample broachers enclosed in paper book to emphasise that the society had organised exhibition on 15th February, 2015 which was based on Go Green Theme to create environment awareness. Ld. AR also invited our attention to page No. 56 of the paper book which was dated 15th September, 2012, it was a programme schedule of 15th September, 2012 of Engineer's Day celebration. The ld. AR explained the Engineer s Day was celebrated every year. The Ld.AR also claimed that the society had organised blood donation camp. 4. Ld. DR relied on the order of the CIT(E). The Ld. DR vehemently submitted that the CIT(E) has to verify the genuineness of the activities of the appellant trust. Accordingly, in this case, the CIT(E) has given categorically finding that though the Trust was formed in 2001 but the appellant has not spent any money on the objects of the trust as evident from the income expenditure account. Therefore, the Ld. DR submitted that genuineness of the trust itself is in doubt as no charitable ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As on 31 ST March, 2016 Expenditure Rs. Income Rs. To Expenditure in respect - By Interest (accrued) 82,126.00 of Properties- Realized On bank account To Establishment Expenses 975,386.00 -Shedule 1 By ACCE annual fees a/c 140,000.00 Other Expenses By Calender sponsorship a/c 79,474.00 To Audit Fees To Miscellaneous Expenses 3,403.00 By Engineer s sponsorship 60,000.00 a/c To Expenditure on objects - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 465,590.00 1,128,391.00 2,604,338.00 3,449,863.00 3,449,863.00 Thus, it is observed: F.Y Total Income Amount Spend on Objects Surplus % 2014-15 34,49,863/- NIL 32.7% 2015-16 4,54,477/- NIL Loss 2016-17 36,41,993/- NIL 33% Thus, the appellant, as observed from the Income Expenditure Account has not spent a single Rupee on the objects of the Society. The Appellant, though have claimed that it has carried out activities like organizing Seminar, but in the Income expenditure account, no expenditure is seen towards the objects of the trust. The Appellant only claimed that the society has carried out activities, but no specific evidence has been filed by the appellant to prove the fact that it has carried out activities for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-clause (i) of clause (a) and compliance of the requirements under sub-clause (ii) of the said clause], he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so 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-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such applications under that subsection from the stage at which they were on that day. (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) or clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration U/s 12AA, within a short period of formation of the trust. Therefore, naturally, in such newly formed trust, there will not be any activity. In such situation, the CIT(E) has to verify the objects of the trust vis a vis Section 2(15) of the Act. The second situation will be a trust which is in existence for a long time. In this situation, the CIT(E) has to verify whether activities of the trust are charitable or not, he has to also verify the objects of the trust. The Hon ble Supreme Court in the case of Ananda Social Educational Trust Vs CIT reported in (2020) 114 taxmann.com 693 (SC) has observed as under: The purpose of section 12AA of the Act is to enable registration only of such trust or institution whose objects and activities are genuine. In other words, the Commissioner is bound to satisfy himself that the object of the Trust are genuine and that its activities are in furtherance of the objects of the Trust, that is equally genuine. The appellant before us is existing since 2001. However, as demonstrated in earlier paragraphs that though the appellant has earned substantial income, not a rupee has been spent on objects of the society. Rather, appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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