TMI Blog2022 (5) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... s/property for its objects - HELD THAT:- CIT(E) asked assessee to incorporate these clauses in its constitution/MOA, but the assessee did not produce amended constitution(MOA), neither before the ld. CIT(E) and nor even before us. The primary condition for grant of registration u/s 12A is that the assessee is a public charitable trust and is required to fulfill the conditions as are mandated under the 1961 Act for grant of exemption from tax. In the instant case, the assessee constitution/MOA clearly provides that in case of winding up/dissolution of the assessee, the proceeds of assets /property shall be distributed amongst the members, which clearly militate against the charitable nature of the trust - there is no irrevocability clause, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /EXM1/2019-20/1017639846(1), rejecting the application filed by the assessee for registration u/s 12A(1) of the 1961 Act. This appeal was heard in Open court proceedings through physical hearing mode. 2. The grounds of appeal raised by the assessee in memo of appeal filed with Income Tax Appellate Tribunal, Varanasi (hereinafter called the tribunal ), reads as under : 1. That the assessee fulfilled all the terms and conditions as required to comply for getting registration as charitable institution. That the assessing officer had asked to show four clauses (clauses 15-18 in order). In the MOA as word by word and not agree with the expression /meaning already mentioned in the MOA. 2. We were given only two hearings to present o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee s constitution(MOA) does not have irrevocability clause. The ld. CIT(E) also observed that the constitution(MOA) of the assessee also does not provide that in case of winding up/dissolution of the assessee, its funds /property will be transferred to another charitable entity. Further, it was observed by ld. CIT(E) that the constitution(MOA) of the assessee does not have a clause that the beneficiaries are a section of public and not specific individuals. The ld. CIT(E) also observed that MOA/constitution of the assessee does not have a clause that the assets/funds of the assessee will be used for the objects of the assessee. The ld. CIT(E) asked the assessee to incorporate these clauses in its constitution. The ld. CIT(E) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not have any clause providing that the funds/property of the society will be used only for the objectives of the society/society/non profit company. Please include this clause in your Society Deed/Memorandum of Association and file a certified copy of the amended Society Deed/Memorandum of Association. 5. The ld. CIT(E) observed from perusal of the constitution of the assessee (Memorandum of Association) that at the time of dissolution of assessee, the proceed will be divided amongst the members. The winding up clause as mentioned in the Memorandum of Association was reproduced by ld. CIT(E), as under: If the company shall be wound up, the Liquidator may, with the sanction of a special resolution of the company and any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, and proceeded to decide this appeal after hearing ld. CIT-DR and material on record. The ld. CIT-DR vehemently supported the order passed by ld. CIT(E) and submitted that even after grant of opportunity by ld. CIT(E), the assessee did not produced the amended constitution (MOA), and hence ld. CIT(E) rightly rejected the assessee s application for grant of registration u/s 12A(1). We have observed that ld. CIT(E) has rejected the application of assessee for grant of registration u/s 12A on four grounds, firstly that the assessee s constitution(MOA) does not have irrevocability clause, secondly that the constitution of the assessee also does not provide that in case of winding up/dissolution of the assessee, its funds /property will be tra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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