TaxTMI 
TaxTMI 
2013 (9) TMI 341
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....ines into hand flush with twin leach pits for onsite disposal of human excreta. Therefore income over expenditure a/c transfer to corpus fund cannot be termed at profit earn during the year. Therefore ld.CIT is in error in facts & law to rejecting application u/s 12AA of I.T.Act. 3. That the assessee has right to add, delete or modify any grounds during the appeal proceeding." 3. The facts of the case are that the assessee society had filed an application for registration under Section 12A of the Income-tax Act on 12.2.2010. As per order under Section 12AA(1)(b)(ii) dated 4.8.2010, the registration of the trust was rejected. On appeal, the ITAT, vide order dated 8th December, 2010 in ITA No.4420/Del/2010, set aside the matter to the file of the CIT with the following finding:- "4. From the reading of Para 1 vis-a-vis 2, 4 & 5, it is not clear as to whether the Commissioner of Income-tax intended to consider the assessee's application for registration under sec. 12A or application for renewal of registration under sec. 80G of the Act. The assessee has taken a ground regarding its application for registration under sec. 12A of the Act. In the light of this contradictory averment m....
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....ciety vis-a-vis the relevant provisions of the Act. The relevant part of section 2(15) of the Income-tax Act in this regard is extracted below:- "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility including preservation of environment, watersheds, forest and wild life and preservation of monuments or places or objects of artistic or historic interest. Provided that the advancement of any other object of general public utility shall not be a charitable purpose if it involves the carrying on of any activity in the nature of trade, commerce or business." 6. In such a case, even if the contention of the applicant that it is engaged in the object of general public utility is accepted, the same is in the nature of trade, commerce or business as admittedly consideration is received. Thus, the society is not engaged in any charitable purpose under the definition of section 2(15) of the Income-tax Act, 1961, as discussed above." 5. Aggrieved with the order of learned CIT, the assessee is in appeal before us. 6. At the time of hearing before us, the learned counsel for the assessee argued at lengt....
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....[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 things 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, and a copy of such order shall be sent to the applicant :" 9. From the above, it is clear that learned CIT, on receipt of an application for registration of a trust or institution, is empowered to call for such documents or information as he thinks necessary. For registration of the trust or the institution, he has to satisfy himself about - (i) the object of the trust or the institution, (ii) about the genuineness of the activities of the trust or institution. Once the CIT is satisfied that both the above conditions are satisfied, then he will pass an order in writing registering the trust or the institution. 10. Section 2(15), ....
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....thin the ambit of proviso to Section 2(15). The learned counsel for the assessee has stated that while doing so, the CIT has exceeded his jurisdiction as provided under Section 12AA of the Income-tax Act because the subsequent development cannot be considered by him while considering the registration under Section 12AA. In support of this contention, he relied upon the decision of Hon'ble Karnataka High Court in the case of Sanjeevamma Hanumanthe Gowda Charitable Trust (supra). The facts in the above mentioned case were that the Director of Income-tax (Exemptions) rejected the application for registration of the assessee, a charitable trust, on the ground that it was carrying on its activity by letting out the marriage hall on hire. The Tribunal on appeal held that the hiring of the choultry was not for attainment of other objects, but seemed to be the main object so far pursued by the assessee and therefore the assessee was not established wholly for charitable purposes. On appeal, their Lordships of Karnataka High Court held as under:- "Held, allowing the appeal, that the authorities had not kept in mind the mandatory provisions. They had not applied their mind in the way they w....