NUTAN JEEVAN FOUNDATION,KOLKATA vs. CIT, (EXEMPTIONS), KOLKATA, KOLKATA

The assessee is a trust which came into existence by a deed of trust dated 21.2.2015. It made an application for registration u/s12AA of the Income Tax Act, 1961 (Act) before the Ld. Commissioner of Income Tax (Exemptions), Kolkata (CIT(E) for short) on 28.05.2015. The Society appeared before the CIT(E) and made submission and also submitted all documents to support its application. The CIT(E) however rejected the application vide his order dated 9.10.2015 for the reason that the activities of the Trust were found to be bare minimum to justify the claim of Registration. The assessee being aggrieved by the rejection of the registration u/s.12AA of the Act has preferred appeal being ITA No.1448/Kol/15.

We have heard the rival submissions. The impugned order is a non speaking order and does not spell out the reason as to why the registration is being denied to the Assessee u/s.12AA of the Act. The reason as we can gather from the impugned order is that the CIT(E) expects that the trust should have carried out sufficient activities and since the activities were not large in number, the registration is being denied. The Provisions of Sec.12AA of the Act reads thus: “12AA. (1) The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) of sub-section (1) of section 12A, shall— (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he— (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant :….”.

As can be seen from the aforesaid provisions, the question whether activities of the trust are minimum or not is not a relevant criteria for grant of registration. Since, no other reasons have been given for not granting registration to the Assessee, we are of the view that the Assessee is entitled to grant of registration. If the objects of the trust have objects which are charitable in nature and if there is no material to suggest that the activities of the trust are not genuine, then that would be sufficient to allow registration subject to fulfillment of other conditions for grant of registration. We are therefore of the view that the Assessee is entitled to grant of registration u/s.12AA of the Act. We hold and direct accordingly.

In fact the Hon’ble Allahabad High Court in the case of CIT vs Varanasi Welfare Trust in of 2014 in its judgment dated 12.11.2014 has held that at the time of granting registration u/s 12AA of the Act the Commissioner is not entitled to look into the activities where the activities have not or are in the process of its initiation. The Hon’ble Punjab and Haryana High Court in the case of CIT vs Spring Dale Educational Society (2011) 16 Taxmann.com 285 (P&H) has taken a view that while examining application seeking registration u/s 12AA, manner of application of funds of trust do not fall within purview of Commissioner. The aforesaid decision also support our conclusions as above.

As far as is concerned the grant of recognition u/s.80G (5) of the Act was denied because of absence of registration u/s12AA of the Act. Since registration u/s12AA of the Act is being allowed, we are of the view that the Assessee should be granted approval u/s.80G (5) of the Act also. We hold and direct accordingly.

In the result, both the appeals are allowed.