TMI Blog2023 (3) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... nsonance to its objectives renders the impugned order of the Ld. CIT(Exemption) perverse to the facts on record. Further, the only requirement for granting the registration is that the object of the society should be charitable in nature and its activities were genuine. On this issue, case of M/s Ananda Society and Educational Trust [ 2020 (2) TMI 1293 - SUPREME COURT] has laid down the basic principles for allowing registration by observing that Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied 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 of the Act. 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. Thus we hold that the appellant assessee s grievance is genuine and acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. That while denying the registration u/s 12AA of the Act, the Ld. CIT(Exemption) never held that the Trust was not for charitable Trust as defined u/s 2(15) of the Act. 7. That the order of the Ld. CIT(Exemption) is perverse on account of consideration f facts which are not relevant for deciding an application u/s 12AA and are also volatile on account of non-consideration of vital information submitted by the Appellant. 8. That on the facts and circumstances of the case and in the law, the Ld. CIT(Exemption) has grossly erred in denying registration to the appellant trust u/s 12AA of the Income tax Act as claimed. At the stage of grant of registration u/s 12AA of the Act, the Ld. CIT(Exemption) is supposed to examine only the objects of the Trust and is not appropriate on his part to examine the other aspects which is to be examined by the Assessing Officer on year to year basis at the time of claiming exemption u/s 11 of the Income tax Act. 9. That the order of the Ld. CIT(Exemption) is perverse as the only requirement for granting the registration is that the object of the society should be charitable in nature and its activities were genuine. The Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exemption) is perverse to the facts on record and that the order of the Ld. CIT(Exemption) is perverse to the facts on record as the only requirement for granting the registration is that the object of the society should be charitable in nature and its activities were genuine. The Hon'ble Supreme Court in the case of M/s Anand Social and Educational Trust v/s CIT in Civil Appeal No.5437-5438/2012 vide order dated 19/02/2020 has laid down the basic principles for allowing registration. 4.1 The Ld. AR submitted that at the stage of grant of registration u/s 12AA of the Act, the Ld. CIT(Exemption) is supposed to examine only the objects of the Trust and it is not appropriate on his part to examine the other aspects which is to be examined by the Assessing Officer during the assessment proceeding on year to year basis at the time of claiming exemption u/s 11 of the Income Tax Act. He argued that the Ld. CIT(Exemption) has exceeded the mandate of law that requires it to satisfy himself about the objects and genuineness of the activities of the appellant but instead gone on mere assumptions, presumptions and apprehensions, without appreciating the factual, legal by misinterpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and immediately thereafter, the entire Nation was put under lockdown and all the activities were halted. Keeping in view the sensitiveness of the outbreak of the covid-19, the Union Government issued Press Note dated 31st March, 2020 which clearly substantiates all these facts. The CBDT had issued instructions vide letter No.F.No.380/l/2020-IT(B) dated 08.05.2020 wherein it is categorically mentioned that no communication with the assessee having adverse effect on him/ her is to be done during this period till fresh guidelines are issued by the Board. But inspite of grim situation prevailing in the entire world including India, the assessee trust filed all the information as called for by the Ld. CIT(E) on different dates. These facts have duly been incorporated by the Ld. CIT(E) in his order and copies of the submissions made are submitted herewith for your kind perusal. 3. The Ld. CIT(E) has not pointed out any adverse on the object and activities of the trust. The Ld. CIT(E) has to satisfy while granting the registration u/s 12AA of the Act that the objects of the assessee trust are charitable in nature and the activities are genuine. The objects of the trust are education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration u/s 12AA of the Act. In our view, merely questioning the purpose of creation of Trust without disputing the charitable nature of objects, genuineness of activities and the manner of carrying out the activities of the trust in consonance to its objectives renders the impugned order of the Ld. CIT(Exemption) perverse to the facts on record. Further, the only requirement for granting the registration is that the object of the society should be charitable in nature and its activities were genuine. On this issue, the Hon'ble Supreme Court in the case of M/s Ananda Society and Educational Trust v/s CIT in Civil Appeal No.5437-5438/2012 vide order dated 19/02/2020 has laid down the basic principles for allowing registration by observing that Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e included in computing the total income of any person. Therefore, the provisions of Sections 11, 12 or Section 10(23C) of the Act, deal with the income of a Trust or of the Institution and the circumstances as to when such income is to be excluded for computing the total income, but the basis of such benefit is the registration under Section 12AA of the Act. Unless a Trust or Institution is registered under Section 12AA of the Act, such Trust or Institution shall not be entitled to exclude from its total income, deductions or contributions or from other sources. Therefore, the principles laid down for excluding the income from consideration under Section 10(22) now 10(23)(C) or Sections 11 and 12 are not applicable while considering the application for registration under Section 12AA of the Act. The application for registration is required to be made within one year of the creation of the Trust. Section 12AA of the Act, requires satisfaction in respect of the genuineness of the activities of the Trust, which includes the activities which the Trust is undertaking at present and also which it may contemplate to undertake. The insertion of sub-section (3) to Section 12AA of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the two conditions which the Commissioner of Income Tax (Exemptions) has to satisfy while granting the registration under Section 12A of the Act, are that the objects of the assessee are charitable in nature and the activities are genuine. Just because the assessee has not filed its income tax returns in earlier years, it cannot be said that the activities of the assessee are not genuine. Reliance placed by the learned counsel for the assessee on the judgment of the Allahabad High Court as well as the order of the Chennai Bench of the Tribunal are not out of place, whereby it has been held that non-filing of return cannot be one of the reasons for denying registration under Section 12A of the Act. With regard to the second objection raised by the Commissioner of Income Tax (Exemptions) that as per clause- 12 of the Memorandum of trust, the trustees have been given absolute powers to manage the property. We have perused the clause-12 of the Memorandum of the trust, whereby the trustees are authorised to demise the immovable property or properties of the trust either from year to year or for any fixed term or for any term of years or on monthly basis at such rent and subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
