TaxTMI 
TaxTMI 
TaxTMI 
2013 (10) TMI 596
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....hat the registration has been refused only on the basis of suspicion, conjectures and surmises which is not permitted under the Law and as such the order refusing registration is illegal, arbitrary and unjustified. 4. That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable." 3. The brief facts of the case are that the assessee society filed an application under section 12AA of the Act on 24.4.2012. The assessee society was registered under the Societies Registration Act on 13.4.2012. The Commissioner of Income Tax called for a report from the Assessing Officer in order to verify the genuineness of the objects and activities of the society. Thereafter an opportunity of hearing was afforded to the assessee in order to verify the genuineness of objects and its activities. The Commissioner of Income Tax vide the documents furnished by the assessee noted that the brief facts of the case are that "Shishu Niketan Model School" an existing society, is already registered under section 12AA under the I.T. Act since 1978. It has been running four schools, two in Chandigarh, one in Moh....
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....contained in the I.T. Act. The Commission of Income Tax vide para 8 thus held as under: It is seen that the Society has been set up by registering with the Registrar of societies on 3.04.2012 but no activity has been started even upto the date of present proceedings. In the absence of any activities having been carried out there is no material before the undersigned to verify the genuineness of objects and activities of the Society. In view of the feels discussed above, the applicant Society is not eligible for grant of registration u/s I2AA Act being no activity in the nature of charitable activity having been carried out since its inception. The application of the Society for registration u/s 12AA of the Act s, therefore, rejected. 4. The assessee is in appeal against the said order of the Commissioner of Income Tax passed under section 12AA of the Act refusing registration to the assessee society. The learned A.R. for the assessee pointed out that the assessee society was found on 13.4.2012 and the aims and objects of the assessee society were placed at page 7 of the Paper Book. Our attention was drawn to clause 4(i) and (ii) ....
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....imary, middle, secondary and higher education including running of engineering and medical colleges, polytechnic institutes and various vocational courses to children seeking recognition. The society shall provide education to the students for the various examinations conducted by different Indian/Foreign Universities, Boards and Institutions etc. ii) To affiliate, get recognition of the schools and colleges maintained by the society to the Universities, Education Boards and other Authorities and to observe the Rules and Regulations prescribed by them or contained in the Education Code, etc. and to receive grants-in-aid. 7. The assessee moved an application for registration under section 12A of the Act in form No.10A. The copy of the said application is placed at page 2 of the Paper Book. Alongwith the said application the assessee enclosed the copy of the instrument under which the said trust was created and also copy of accounts of the Bank statement of assessee society for one year. The perusal of the bank statement placed at pages 3 and 4 of the Paper Book reflects that the assessee had made a cash deposit of Rs.5000/- in the said bank statement on 23....
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....ne in Mohali and one in MDC Panchkula The existing Society is registered under Section 80 G and also registered under Section 10(23)C of the Income Tax Act The new society proposes to approach for taking on lease the management of existing school to be run on day to day basis Since the existing society is running four schools, and in order to ease the pressure and effectively manage the affairs in a better way the new society can play a supportive role. The existing School at Sector 43 Chandigarh is already having around 1400 Students with complete infrastructure i.e. Land & Building, Furniture & Fixture and Other Facilities to run the school. The school is located on a plot measuring more than one acre allotted by Punjab Urban Development Authority The school building has provision for 60 classrooms, Reception area , Staff rooms , Sports room etc. and a large basement for use for various indoor activities. The school has complete infrastructure as per requirements laid down by CBSE for Computer and Science Laboratories, Library, Drinking water, Fire fighting, Play area etc. The school is Affiliated with Central Board of Secondary....
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....- and the bank balance at Rs.5000/-. The expenditure incurred by the assessee was legal expenses of Rs.1100/- and miscellaneous expenses of Rs.480/- which was booked up to 31.3.2012. 10. The issue arising in the present appeal in the given facts and circumstances is that whether the assessee is entitled to the claim of registration under section 12AA of the Act. Under the provisions of section 12A of the Act it is provided that in order to avail the exemption under sections 11 and 12 of the Act, the trust or institution is to get itself registered as per section 12A of the Act. The relevant provisions of section 12A and 12AA of the Act read as under: 12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the....
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....following the financial year in which such application is made. 12AA. (1) The 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 : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of b....
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....t or the institution. The Commissioner of Income Tax may also make such enquiry as he deem necessary in this behalf. The Commissioner of Income Tax on being satisfied about the objects of the trust and genuineness of its activities is to pass an order in writing registering the trust or institution or refusing to register the trust or institution, copy of which is to be served upon the assessee. It is further provided under the section that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. The time limit for passing the order granting or refusing the registration under sub-section (1) shall be before the expiry of six months from the end of month in which the application was received by the Commissioner of Income Tax, as per sub-section (2) of section 12AA of the Act. Under section 12AA(3) of the Act, the Commissioner of Income Tax is empowered to withdraw the registration already granted to a trust or institution in case he is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution. 12. In view of the ....
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....ies of the trust or institution is to be charitable or for religious purposes. As pointed out in the paras hereinabove, the conditions for applicability of sections 11 and 12 of the Act are provided under section 12A of the Act and one of the conditions is that the person in receipt of the income which he claims to be for charitable purposes is to make an application for registration of the trust or the institution in the prescribed form and in the prescribed manner to the Commissioner within the stipulated period of creation of the trust or the establishment of the institution. On receipt of the application in the requisite form No.10A alongwith Instrument of creation of the trust or the institution, the procedure for registration of the trust or the institution by the Commissioner is provided under section 12AA of the Act. Admittedly, at the time of grant of registration the Commissioner is not empowered to examine the application of income but he has to examine whether the application is made in accordance with the requirements of section 12A of the Act and whether form No.10A has been properly filled in. The Commissioner is further to examine whether the objects of the trust ar....
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....ed by different Indian/Foreign Universities, Boards and Institutions etc. ii) To affiliate, get recognition of the schools and colleges maintained by the society to the Universities, Education Boards and other Authorities and to observe the Rules and Regulations prescribed by them or contained in the Education Code, etc. and to receive grants-in-aid. 17. The perusal of the above said objects of the assessee society reflect that the assessee has a wide range of objects, which it may consider as its activity of running the trust. The objects of the assessee are in different directions and different fields and are general in nature. If we have look at clauses 4(i) and 4(ii) of aims and objects, the objects, of the trust are to provide: (a) Advancement, Research and dissemination of education-literacy, scientific and scholastic; (b) Opening and to start, establish, run, takeover or manage and maintain schools; (c) Running of engineering and medical colleges, polytechnic institutes and various vocational courses to children seeking recognition; (d) Education....
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....lready registered under section 12A of the Income Tax Act since 1968. The existing society is running four schools, Two in Chandigarh, one in Mohali and one in MDC Panchkula The existing Society is registered under Section 80G and also registered under Section 10(23)C of the Income Tax Act The new society proposes to approach for taking on lease the management of existing school to be run on day to day basis Since the existing society is running four schools, and in order to ease the pressure and effectively manage the affairs in a better way the new society can play a supportive role.. The existing School at Sector 43 Chandigarh is already having around 1400 Students with complete infrastructure i.e. Land & Building, Furniture & Fixture and Other Facilities to run the school. The school is located on a plot measuring more than one acre allotted by Punjab Urban Development Authority The school building has provision for 60 classrooms, Reception area , Staff rooms , Sports room etc. and a large basement for use for various indoor activities. The school has complete infrastructure as per requirements laid down by CBSE for Computer a....
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....ivities to be undertaken by the society. The assessee before us had pointed out in paras hereinabove too many objects, which are in varied directions and some of the objects are not charitable in nature. The assessee till date has not identified the primary objects which the trust wants to undertake in order to carry on its charitable activities. Once the direction of the trust is not established, the genuineness of the activities cannot be verified by the Commissioner. The Hon'ble Madras High Court in CIT v. Ootacamund Gymkhana Club [1977] 110 ITR 392 had held that on an application being filed under section 12A of a trust of institution is registered as charitable or religious one and the registration itself would be sufficient proof of the fact that the trust or institution concerned was created or established for charitable or religious purpose. 21. The Hon'ble Supreme Court in CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 had held that "If there were two distinct objects, one of which was charitable and the other not charitable and if the fund of the association could be applied for either of these purposes at the discretion of those in authority, then it cannot be held....