TaxTMI 
TaxTMI 
2013 (3) TMI 377
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....gistration under Section 12 AA and for approval under Section 80 G move by the appellant deserves to be allowed?" Briefly stated the facts giving rise to this appeal are that Hardayal Charitable & Educational Trust, 318, Shambhu Nagar, Shikohabad, was established by a Trust deed executed on 17.11.2008. It was registered with Sub-Registrar, Shikohabad on 26.11.2008. The objects of the trust include establishment and maintenance of the schools, colleges and institutions for imparting education in different fields/ subjects with the object of helping the poor and destitute. The trust deed also provides for medical benefits to the poor, needy and the aged. The Trust applied for grant of registration under Section 12AA of the Income Tax Act, 1961 (in short the Act) along with application for registration on Form No.10A and for grant of approval under Section 80G (5) (iv) in Form No.10G, with certified copy of the Trust deed. The Commissioner of Income Tax-II, Agra directed the trust to furnish certain information, which was provided by the trustees with its letter dated 1.8.2011. The trustees disclosed the donations received as trust fund/ corpus fund from Shri Hardayal Singh Educ....
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....ct (P) Ltd., complete with logo of the milk product company, which shows that the Trust intends to promote the business of its family concern and that the commercial motive is in no way subservient to, charity as the object of the Trust. The Commissioner of Income Tax-II, Agra further recorded in her order that she is not satisfied that the objects of the Trust are charitable in nature and that since Trust deed is not registered as reported by JCIT on enquiry, the trust is not liable for approval under Section 80G also. The Trust filed ITA No.443/444/Agra/2011, which was heard on 2.3.2012 and dismissed on 7th March, 2012. The Tribunal discussed the provisions of Section 12AA of the Act and judgment of Kerala High Court in the case of Self-Employers Service Society v. CIT, 247 ITR 18 Ker.; judgment of Delhi High Court in All India J.D. Educational Society v. Director General of Income Tax (Exemptions), 338 ITR 218 (Del.); judgment of Allahabad High Court in CIT v. Red Rose School, 212 CTR (Alld.) 394 (HC); the judgment of Karnataka high court in DIT v. Garden City Educational Trust, 28 DTR (Kar) 139 and one other judgment of Karnataka High Court in DIT (Exemption) v. Meenakshi....
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....mption certificate will be effective from assessment year 201213, the number and date of the order should be mentioned on each and every receipt issued to the donor and that the exemption under Section 11 (2) will be granted on merits after proper investigation. The conditions further provide that information on any change in the constitution of the trust / society should be intimated immediately to CIT-II and concerned Assessing Officer and that the income and expenditure accounts statement of the trust/ society should be furnished for each financial year regularly before the concerned Assessing Officer. Shri Rahul Agrawal appearing for the appellant trust submits that there was no material with the Commissioner of Income Tax-II and the Income Tax Appellate Tribunal, Agra to record its conclusions against the Trust. The object of the trust is not to carry out commercial activity and promote the business of family concerned. As a new entity the appellant had to necessarily spend money on advertising and rely upon the established brand equity enjoyed by the other concern, to attract the students to its courses. The Commissioner never questioned the appellant on the lack of regist....
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....,82,526 between 1.4.2011 to 2.8.2011. The construction of the college for medical, engineering and management studies was in progress. The Commissioner has not made any observations with regard to objects of the trust. He found that the prospectus was actually used for advertisement of the other industries of the group namely Hardayal Milk Product (Pvt.) Ltd. and carried the logo of the milk product company. The object was to promote the business of the family concern, and had commercial motive, which was subservient to the stated charitable motive. The Commissioner was not satisfied that the objects of the trust is charitable in nature and thus she refused to grant registration. Shri Govind Krishna has relied upon the same judgment, which have been cited by learned counsel appearing for the appellant and submits that so far as the substantial question of law no. (b) is concerned, the findings recorded by the Commissioner of Income Tax-II, Agra and the Tribunal are findings of fact, which cannot be treated as perverse. The appellant has not denied that while the construction of the college was in progress, a heavy amount was invested in publishing the prospectus, which carried one ....
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....e post or the establishment of the institution. If the Commissioner is for the reasons to be recorded in writing satisfied that the person in respect of income was prevented from making the application before the expiry of the period for sufficient reasons, and (ii) from the first date of the financial year in which application is made, if the Commissioner is not so satisfied. Section 12AA provides for procedure for registration and is quoted as below: "Section 12AA. PROCEDURE FOR REGISTRATION. (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) 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 a inquiries as he may deem necessary in this behalf; and (b) After satisfying himself about the objects of the trust or institution 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 trus....
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....be claimed in the absence of registration. The enquiry by CIT is restricted at the time of registration to the activities, which are genuine. Genuineness of the activities of the trust or the institution has to be seen keeping in mind the object thereof, which means the Commissioner shall satisfy himself to the fact that the activities are genuine and in consonance with the object of the trust or the institution. In other words it was held that after establishing and running a school set out as object of the society, given in the bylaws, he has to be satisfied that the Society has established the school, where education is being imparted as per rules and the factum of establishment and running school is genuine activity. The enquiry regarding genuineness of the activity cannot be stretched beyond this. In Director of Income Tax (Exemptions) v. Meenakshi Amma Endowment Trust, (2011) 50 DTR (Kar) 243, the Karnataka High Court held that where a trust is formed and within a week registration under Section 12A is sought, there is no prohibition under the Act seeking such registration. The activities of the trust have to be considered, after the formation of trust or after expiry of t....