TMI Blog2022 (12) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the issue with regard to the activity of the assessee being not that of commercial or business in nature, the issue of cash transaction cannot be gone into at the time of consideration of the application under section 12AA of the Act. Thus we hold that the order of the CIT(E) is perverse to the facts on record. We further hold that there was no material on record to hold that objects of the trust were either not charitable in nature or its activities were not genuine. Therefore, CIT(Exemption), Chandigarh is directed to grant the registration u/s. 12AA of the Act to the appellant trust from the date of application. Appeal filed by the assessee is allowed. - I.T.A. No. 442/Asr/2018 - - - Dated:- 20-10-2022 - DR. M. L. MEENA , ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE , JUDICIAL MEMBER Appellant by : Sh. P. N. Arora , Adv. Respondent by : Sh. Rohit Sharma , CIT DR ORDER Per Dr. M. L. Meena , AM This appeal has been filed by the assessee against the order dated 30.05.2018 passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh (hereinafter referred to as the CIT(Exemption), challenging therein rejection of its application for registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken over needed to be clearly established which regrettably has not been done. Specific resolutions and their registration by the competent authorities, wherever applicable, in case of these entities need to be in place. There is no evidence, in case the ownership can't be established, whether the same have become public property and whether there is a permission/go-ahead from the J K state government since alienation of land rights and ownership is guided by special provisions endemic to the state and its special status. In view of the above, the activities of the applicant trust cannot be termed to fall under the category of charitable purpose . 4.1. The Ld. CIT(E) further observed that large scale cash transactions during the first year of its formations pose a dent on the claimed charitable intent of the applicant trust given that the F.Y. coincided with the period of demonetization. It is also the case that practically the entire income (being claimed to be exempt) is unverifiable and not amenable to scrutiny; that making donations to some other entity and spending public money received through donations (mostly in cash) towards construction works for variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of inspiration to the seekers of Truth and Perfection. Lakhs of Pilgrims and Devotees without distinction of caste and creed from all over the country and abroad pay their respects at the Holy Shrine with their heartfelt desires and cherished wishes and return brimful with the fruition of their inner aspirations. The Shrine is situated 250 Kms from Jammu and 180 Kms from Srinagar. 2. The Trust was formed on 7.5.2016 and registered by the Sub-Registrar Poonch. The Trust Carried out the under noted activities. 3. The Trustees of the Trust has taken over the Corpus/Capital Fund of Rs. 408.85 lacs and the fixed and Current assets, loans advances alongwith Closing balance of Imprest Bank balances and TDR/CCR as on 31.3.2016 of Rs. 408.85 lacs details of which are given in Para 1(c) of reply dated 13.9.2017. 4. The Trust is presently maintaining and running the under noted Institutions whose names and addresses are as under: i) Ziarat Sharief Guntrian, Tehsil Haveli, Poonch. ii) Ziarat Sharief Takia, Bandi Chechian, Tehsil Haveli, Poonch. iii) Gundi Masjid, Tehsil Haveli, Poonch. iv) Jamia Masjid Sharief Guntrian, Tehsil Haveli, Poonch. v) Mia Wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic limb u/s. 2(15) of the Income Tax Act for charitable activities fall under:- i) Relief to the poor ii) Medical Relief and iii) Advancement of any other general public utility. In support he placed reliance of on Jurisdictional Punjab and Haryana High Court in the cases of CIT(E), Chandigarh vs. Shirdi Sai Darbar Charitable Trust in ITA No. 38 of 2017 dated 27/03/2017 and CIT(E) vs. Shri Mahaveer Jain Society (Regd.) in ITA No. 670, 671 (ASR)/2015, dated 11/09/2017 and that of Ananda Social Educational Trust v. CIT [2020] 114 taxmann.com 693/272 Taxman 7/426 ITR 340 (SC). 6. The Ld. DR supported the impugned order. However, he has not controverted the fact that CIT(E) has not disputed the charitable nature of objects and genuineness of the activities of the Trust except that the applicant clearly does not carry the character of an entity with charitable intent as it is running religious mosque with hardly charitable activity. 7. We have heard both the sides, perused the record, written submission and the impugned order. Admittedly, the CIT(E) has not disputed the objects and the genuineness of the activities in consonance to objects of the trust. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the student from poor families which are covered within the meaning of section 2(15) of the act. The learned counsel further argued that the appellant trust is engaged in the activity for a noble cause for the betterment of public by serving the society at large. The counsel argued that the learned CIT exemption did not appreciate that only two things are required to be examined while granting registration that is charitable objects within the meaning of section 2(15) and the activities in consonance to these objectives of the trust. In support he placed reliance on the judgment of Jurisdictional High Court, as above. 10. The Ld. CIT (E) raised objection to cash transactions during the first year of its formations coincided with the period of demonetization as dent to claim charitable intent of the applicant trust for the financial Year under consideration and that use of donation money in construction works for various entities like Masjids etc. do not fall in any of the categories of charitable purpose under, section 2(15) of the Act. However, he is admitting the facts of charitable activity, the amount spent on of course to extent of meager amount to the gross receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied in order to ensure that the object of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12. In other words, if it appears that the objects of the trust and its activities are not genuine that is to say not charitable the Commissioner is entitled to refuse and in fact, bound to refuse such registration. [Para 9] The purpose of section 12AA 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. [Para 11] Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, it is viewed that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled legal proposition that at the time of grant of registration, Commissioner of Income-tax is not required to examine the application of income and has to examine whether the objects of the Trust are charitable and whether the application is made in consonant with requirements of section 12AA of the Act read with rule 17F of the Income-tax Rules. The genuineness of the activities of the Trust is not a matter to be looked into at the time of dealing with the issue of registration of the Trust under section 12AA of the Act. 15. From conjoint reading of the Trust Deed, it is axiomatic that primary purpose/objects of the assessee enumerated in the Trust Deed are charitable in nature (APB Pgs.4 to 6). The other clauses of the Trust Deed had to be necessarily read in the context of the aforesaid clauses. 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 medical help and relief to poor besides imparting value addition to general public through spiritual teaching and education from madrasa and masjids. The aforesaid activities in consonant to objectives of the trust has not been disprove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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