AL-AZIZ ISLAMIC AND MODERN EDUCATIONAL TRUST,MUMBAI vs. CIT (E), MUMBAI

The Assessee claims that the grounds of rejection of registration u/s 12A by the learned C.I.T. (Exemptions) for non-application of its income and for not able to satisfy about the genuineness of the activity of the trust is totally incorrect and arbitrary.

The Assessee claims that in the case of D.P.R. Charitable Trust (supra) the Hon'ble Madhya Pradesh 1-ugh Court has established that application for registration u/s 12A has to be made in Form no. WA prescribed by Rule 17A before the expiry of I 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 the 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 section 12A new rule 17A and whether Form no. 10A has been properly filled up. He may also examine whether the objects of the trust are charitable or not. Sec I2AA nowhere provided 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 purpose. The Assessee claim that the same is applicable to his case and seeks relief as per the said order.

The Assessee is a trust registered under the Charity Commissioner vide registration no. E-32480(M) DT. 01/09/2016. The Assessee is holding PAN AAFTA568OF. The Assessee has filed the Income tax 4 returns for the year ending 31st March, 2017 & 31 March, 2018. The Assessee had made an application on 18/12/2017 in Form No. 10A for registration of charitable or religious trust u/s 12A of the Act along with the certified copies of the Trust Deed and Certificate of Registration. The Assessee had represented through its Authorized representative from time to time and produced the required documents and also the details required in support of the application made in form no. 10A for registration u/s 12A of the Act before the DIT(Exemptions) and now before us. The Assessee produced before the Department the income tax returns filed for the year ending 31st March 2017 & 31 March 2018 along with the Income & Expenditure account and Balance Sheet for the relevant periods. The Assesse submitted the Bank statements showing the receipt of Donation of Rs. 148500/- on 8th May, 2018. The Assessee through its Authorized representative gave a written explanation that as the object of the Trust is to provide the educational help to the poor and deserving students and the academic year 2018/19. The CIT(E) noted that the assessee trust has just started & the Trustee are awaiting the application from the poor and deserving students for the payment of their school and college fees and hence the income received is still not utilized. And hence there are no activities on utilization of the funds of the Trust. The Authorized representative also submitted in writing that if a period of 15 days is given the Assessee can produce the documents evidencing the utilization of the funds towards the objects of the Trust. The CIT (E) was in a hurry to complete the matter and did not give an opportunity for the activities to be proved. The CIT (E) rejected the application in form no. 10A on the ground that the activities of the Trust was not proved though there was a donation of ₹ 14,85,001/- received by the trust. Though the CIT (Exemptions) was in possession of the copy 5 of the Trust deed duly certified by the charity commissioner containing the objects

Before us, the learned Counsel for the assessee stated that the CIT(E), Mumbai has totally relied on the accounts for the year ending 31.03.2017 and 31.03.2018, wherein assessee has not carried out any activity but later on the assessee has carried out the activities and assessee qua that filed accounts for the year ending 31.03.2019 and the details of receipts and accounts are submitted as under: - “3. The trust received donations solely from the Chairman of the Trust Mr. Abdul Aziz Ismail Sheikason by way of Cheques drawn of the Trust as follows:

In the result, the appeal of assessee is allowed for statistical purposes.