TaxTMI 
TaxTMI 
TaxTMI 
2009 (7) TMI 832
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....emorandum of appeal for examination of which the appeal has been admitted are as under : "9. Whether the Tribunal was correct in holding that the assessee is entitled to registration in accordance with section 12A of the Act as it is carrying on activity of charitable purpose in terms of section 2(15) of the Act without examining the various materials relied on by the Director (Exemption) who had arrived at a categorical conclusion that a business activity was carried on by the trustees for their family benefit and, consequently, recorded a perverse finding ? 10. Whether the Tribunal was correct in proceeding to allow the appeal filed by the assessee without appreciating the issue regarding delay in filing the application ....
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....sioner of Income-tax could examine such an application and grant registration either prospectively or retrospectively from the date of coming into existence of the organization, if the Commissioner was so satisfied that the delay in seeking for grant of registration in terms of section 12A was properly explained and justified. 7. It appears that the assessee-trust had filed an application for grant of registration under section 12A by following the procedure in terms of section 12AA, i.e., applying in the requisite form etc., as per application dated April 26, 2002. The assessee, it appears, also had claimed the exemption from the date of the inception of the trust, viz., fromFebruary 27, 1992. 8. This application was proces....
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....in the case of CIT v. Red Rose School [2007] 212 CTR 394 (All) and which in turn had followed several other like decisions of other High Courts, allowed the appeal being of the view that the scrutiny as to the application of funds is an exercise required to be undertaken by the Assessing Officer and not necessarily by the Commissioner while granting registration under section 12A in an application filed under section 12AA and, accordingly, allowed the appeal, while reserving liberty to the Assessing Officer to examine the manner of application of funds as indicated in the returns filed by the assessee. 11. Aggrieved by this order, the present appeal Sri Seshachala, learned standing counsel for the appellant-Commissioner would very v....
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.... its object and as to whether the trust is one carrying on that activity or totally otherwise. 14. Learned counsel for the assessee would also support the view taken by the Tribunal with further authorities other than those referred to by the Tribunal and particularly, the judgment of our court in the case of Sanjee vamma Hanumanthe Gowda Charitable Trust v. Director of Income-tax (Exemptions) [2006] 285 ITR 327 (Karn). Relying on this judgment, the submission of Sri Parthasarathy is that the Commissioner is not required to examine the manner in which the funds are generated by the trust, as to whether it is from a charitable activity or business activity or the manner in which the funds are generated. But the question which is requ....
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.... has to be accepted that the trust is having a charitable purpose as its object and may qualify for claiming exemptions in terms of sections 11 and 12 subject to fulfilling conditions enumerated therein and, if so, grant of registration, so long as the procedural requirements are complied is inevitable. 17. It is not the finding of the Commissioner that the applicant-assessee had not complied with any of the procedural requirements. The Tribunal is fully justified in observing that the manner of application of funds and as to whether the applicant-assessee can claim the benefit of exemption in terms of sections 11 and 12 is a question which has to be examined by the Assessing Officer at the stage when it is urged and not by the Comm....