MANDIR SHRI GOVERDHAN NATH JI,JHALAWAR vs. COMMISSIONER OF INCOME TAX (EXEPTION), JAIPUR

submitted that since the order of the ld CIT (Exemptions) is not based on correct appreciation of facts and legal proposition, therefore, the same deserves to be set aside.

2.3 On the other hand, the ld. DR appearing on behalf of the Revenue relied on the orders of the ld CIT (Exemptions). Mandir Shri Goverdhan Nath Ji vs LD. CIT (E) Jaipur 2.4 We have heard the ld. counsel for both the parties and have perused the materials placed on record. It is undisputed fact that the assessee trust is registered under the provisions of Rajasthan Public Trust Act, 1959 which proves that the assessee is a public trust whereas the ld CIT (Exemptions) has recorded the contrary findings based on incorrect appreciation of facts. The ld CIT (Exemptions) has nowhere discussed the registration of the assessee trust under the Rajasthan Public Trust Act, 1959 and has decided the matter by presuming that the assessee trust is a private trust. Apart from this, we have also gone through the provisions of Section 12AA(4) of the Act which reads as under:-

‘’12AA(4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub- section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently it is noticed that (a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub- section (1) of section 13; or (b) the trust or institution has not complied with the requirement of any other law, as referred to in sub-clause (ii) of clause (a) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non- compliance has occurred, has either not been disputed or has attained finality, then, the Principal Commissioner or the Commissioner may, by an order in writing, cancel the registration of such trust or institution:’’ Mandir Shri Goverdhan Nath Ji vs LD. CIT (E) Jaipur After appreciating the provisions of Section 12AA(4) of the Act, we are of the view that this provision is wrongly invoked by the ld CIT (Exemptions) while denying the registration of the assessee trust as it has been categorically mentioned under the provisions of Section 12AA(4) of the Act which provides for cancellation of registration if it is subsequently noticed that due to operation of Section 13(1) the activities of the trust are not carried out in the manner provided under the provisions of Section 11 and 12 of the Act. Therefore, in our view, this section would come into play only when registration had already been granted to the assessee. Therefore, the ld CIT (Exemptions) has wrongly invoked the provisions of Section 12AA(4) of the Act while refusing the registration u/s 12AA (1) of the Act. It is a settled law that at the stage of grant of registration, ld CIT (Exemptions) is not required to enquire whether the conditions of section 13 are fulfilled or not. At this stage, the ld CIT (Exemptions) was to look into the object of the Trust and genuineness of the activities of the trust. Therefore, keeping in view our above observations and findings, we set aside the order of the ld CIT (Exemptions) and restore the matter to the file of the ld CIT (Exemptions) Mandir Shri Goverdhan Nath Ji vs LD. CIT (E) Jaipur to pass afresh order after taking into consideration the documents filed by the assessee trust including the copy of trust deed, copy of registration certificate, list of members of board of trustees and also to verify the object of the trust and genuineness of the activities of the trust. Thus the appeal of the assessee is allowed for Statistical purposes. 3.0 In the result, the appeal filed by the assessee is allowed for Statistical purposes with no order as to cost. Order pronounced in the open court on 23 /01/2020.