THE COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL vs. SEWA DRISHTI SAMITI

ITA-65-2015 (THE COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL Vs SEWA DRISHTI SAMITI) 21-09-2015 Shri Sanjay Lal for the appellant. This is revenue’s appeal under section 260-A of the Income Tax Act, 1961 calling in question tenability of the order-dated 24.4.2015, passed by the Income Tax Appellate Tribunal, Jabalpur in ITA No.111/Jab/2013. Respondent/applicant filed an application under section 12AA, of the Income Tax Act, and by going into various financial aspects of the matter and after going through the cash book and other particulars with regard to payment made by the assessee, the application under section 12AA was rejected. On an appeal being filed by the assessee, the learned Tribunal took note of the law laid down by a Division Bench of this Court in the case of Commissioner of Income Tax Vs. DPR Charitable Trust, (2011) 61 DTR 410, and held that on the grounds indicated as the application could not be rejected, directed for grant of registration under section 12A. Even though Shri Sanjay Lal, learned counsel for the appellant, tried to indicate that the law laid down in the case of DPR Charitable Trust (supra) will not apply in the facts and circumstances of the present case. We find that a coordinate Division Bench of this Court, in the case of DPR Charitable Trust (supra), in paragraph 8 has dealt with the matter in the following manner:- “8. Sec. 12A of the Act prescribes conditions for registration of the trust whereas s.12AA of the Act prescribes the procedure for registration. A careful reading of the relevant provisions would reveal that application for registration under s. 12A has to be made in Form No.10A prescribed by r.17A before the expiry of one year from the date of creation of the trust or establishment of the institution whichever is later. The application has to be made by a person in receipt of income of the trust. Thus while dealing with the application for registration the CIT has to examine whether the application is made in accordance with s. 12A r/w r. 17A and whether Form No.10A has been properly filled up. He may also examine whether objects of the trust are charitable or not. Sec. 12AA nowhere provides that CIT while considering the application for registration is also required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit. The language employed by the legislature in s. 12AA only requires that activities of the trust or institution must be genuine which should be in consonance with the object of the trust. At this stage, the CIT is not required to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of s. 12A r/w r. 17A and whether Form No.10A has been properly filled up. He has also to see whether the objects of the trust are charitable or not. Our view finds support from the Division Bench decision of the Allahabad High Court rendered in the case of Red Rose School (supra) and the decisions in the cases of New Life in Christ Evangelistic Association (supra), Fifth Generation Education Society (supra) and Shantagauri Ramniklal Trust (supra). ”

If the assessment made and the reasons given by the learned competent authority in the order passed rejecting the application under section 12AA(1) of the Income Tax Act, is perused, we find that the application has been rejected on merits after considering various transactions and activities of the Trust in question and not based on the activities of the Trust. That being so, the Tribunal has not committed any error in applying the law laid down in the case of DPR Charitable Trust (supra). No substantial question of law arises for consideration in this appeal. Accordingly, the appeal stands dismissed. (RAJENDRA MENON) JUDGE (C V SIRPURKAR) JUDGE