DIVYA DHRUSHTI CHARITABLE TRUST,,THANE vs. COMMISSIONER OF INCOME-TAX, (EXEMPTIONS),, PUNE

PER ANIL CHATURVEDI, AM :

This appeal filed by the assessee is emanating out of the order of Commissioner of Income Tax (Exemptions) – Pune dated 28.02.2019 passed u/s 12AA(1)(b)(ii) of the Income Tax Act.

Assessee is stated to be a Trust registered under the Bombay Public Trusts Act, 1950 vide registration number A-8586/Thane dated 10.02.2014. It had applied for registration u/s 12AA of the Act on 26.03.2014 before CIT-I, Thane. Vide notification No.53/2014

dt.22.10.2014 the CBDT created the Exemptions charge and the new

jurisdiction was vested with the Commissioner of Income Tax

(Exemptions)-Pune. Assessee submitted that no reply was received

either from CIT-I, Thane or CIT(E), Pune regarding the acceptability or

otherwise of the application filed by the assessee. Assessee thereafter

electronically again applied for registration vide application dated

31.08.2018 before CIT(E), Pune. CIT(E), Pune vide order dt.28.02.2019

rejected the application for grant of registration. Aggrieved by the

order of CIT(E), Pune assessee is now before us and has raised various

grounds, which are argumentative in nature and therefore not

reproduced and the only grievance of the assessee is about the refusal

of granting registration u/s 12AA of the Act.

submitted that all the objects are charitable and that CIT(E) has not

expressed his reservation on any objects of the Trust. He further

submitted that it is a settled law that at the time of registration, the

CIT is only required to look as to whether the objects of the Trust are

charitable or not and the activities are genuine and he is not required

to examine the application of income. He further submitted that

various requirements raised by Ld.CIT(E) were provided by the

assessee. He further submitted that without issuing any show cause

notice and only on the basis of assumptions, Ld.CIT(E), rejected the

application filed by the assessee. He further submitted that the CIT(E)

be directed to grant registration to the assessee. Ld. D.R. on the

other hand, supported the order of lower authorities.

on record. The issue in the present case is with respect to denial of

claim of registration u/s 12A of the Act. The registration u/s 12A of

the Act can be sought either by a Trust or by an Institution. In order

to avail of the benefit of exemption u/s 11 or 12 of the Act, the

activities of the Trust or the Institution must be charitable or for

religious purposes. The conditions for applicability of Sec.11 and 12

are provided u/s 12 A and one of the conditions is that the person in

receipt of the income which he claims to be for charitable purposes

has to make an application for registration of the Trust or the

Institution in the prescribed form and in the prescribed manner to the

Commissioner within the period stipulated therein. The procedure for

registration of the Trust or the Institution by the Commissioner is

provided u/s 12AA of the Act. Sec.12AA(1) requires the Commissioner

to whom an application is made for the registration of a Trust or

Institution to satisfy himself about the genuineness of the activities of

the Trust or the Institution as well as the objects of the Trust or

Institution and for that purpose Commissioner is vested with power to

call for documents or information and is also empowered to make

such inquiries as he may deem necessary in that behalf. The

Commissioner is thereupon empowered to pass an order in writing

either registering an Institution or if he is not satisfied about the

objects of the Trust or Institution and of the genuineness of its

activities, to pass an order in writing refusing to register the Trust or

Institution. Thus it can be seen that at the time of grant of

registration, the Commissioner is not empowered to examine the

application of income. The stage for consideration of the relevance of

the object of the Trust and the application of its funds arises at the

time of assessment. We further find that Hon’ble Kerala High Court in

the case of Shri Anjaneya Medical Trust Vs. CIT (2016) 382 ITR 399

(Ker) on the issue of the scope of inquiry by CIT(A) for the registration

u/s 12A and 12AA has observed as under :

“It is clear from a plain reading of sections 12A and 12AA of the Act that what is intended thereby is only a registration simpliciter of the entity of a trust. This has been made a condition precedent for the claiming of benefits under the other provisions of the Act regarding exemption of income, contribution, etc. No examination of the modus of the application of the funds of the trust or an examination of the ethical background of its settlers is called for while considering an application for registration. The stage for consideration of the relevance of the object of the trust and the application of its funds arises at the time of assessment. Where benefits are claimed by the assessee in terms of sections 11 and 12 of the Act, the question as to the nature of such contribution and income can be looked into. At the time of registration of the trust, going by the binding judgments of the apex court, what is to be looked into is whether the trust is a genuine one and whether it is a sham institution floated only to avail the benefits of exemption under the Act. There is no such finding in the impugned order.”

the objects of Trust as mandated by the provisions of the Act as noted

above. Further it is also not in dispute that assessee had made an

application for registration in 2014 which was not been acted upon

and therefore assessee filed 2nd application in 2018. Considering the

totality of the aforesaid facts, we restore the issue back to CIT(E),

Pune to decide the issue of registration u/s 12AA of the Act in

accordance with law and after granting reasonable opportunity of

hearing to the assessee. We also direct the CIT(E) to dispose of the

application within three months of the receipt of the present order.

Thus, the grounds of the assessee are allowed for statistical purposes.

Order pronounced on 1st day of July, 2019.

Sd/- Sd/- (VIKAS AWASTHY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 1st July, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. The CIT(E) - Pune. 4 The Addl.CIT(E), Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए”/ DR, 5. ITAT, “A” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.