TaxTMI 
TaxTMI 
2014 (8) TMI 207
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....sconstrued by the original Authority, which reads as follows: "As per Rule 17A read with Section 17B, audited accounts of the last 3 years should have been enclosed in Form No.10B" 3. We find, Section 17B of the Income Tax Act is not applicable in the case of charitable institution and further assuming Rule 17B of the Income Tax Rules is made applicable and it has been wrongly quoted as Section 17B, still then, Rule 17A and 17B stand mutually excluded and we give reasons hereunder: The assessee/respondent herein is a trust. The Trust was constituted under a Trust Deed dated 17.11.2008 and was registered on 02.12.2009. An application in Form 10A for registration under Section 12AA of the Income Tax Act was filed on 22.5.2012. In response to the questionnaire dated 17.8.2012, the authorised representative of the assessee has submitted a reply on 04.09.2012 enclosing certain details. The Director of Income Tax (Exemptions) found fault with the language in the Trust Deed and held that the present Trust cannot act as a trustee in another trust or institution. The Authority also held that for more than four years, there was no activity worth its name undertaken by the trust exce....
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....re than three years immediately preceding the year in which the said application is made) for which such accounts have been made up." All that is required to be submitted at the time of application for registration is that the institution should produce certified document evidencing creation of trust with two copies of the accounts of the trust or the institution relating to the previous year or years. 9. In this case, the accounts have been submitted in Form 10A. It is admitted by the Original Authority that the application has been enclosed with documents as required in Form 10A. The invocation of Rule 17B (wrongly quoted as Section 17B) would apply, in a case where the charitable institution was registered under Section 12AA of the Income Tax Act. 10. Section 12A of the Income Tax Act reads as follows: 12A. Conditions for applicability of sections 11 and 12 .--(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....
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....ear in which such application is made. 11. Section 12AA of the Income Tax Act reads as follows: "12AA. Procedure for registration.--(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 being heard. (1A) All applications, pending before the Chief Commissioner on which no order has been passed under cl....
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....the Authority had declined registration of the Trust. A Trust can only do activities within its financial capability. A Trust is not measured by its financial clout but by its philanthropic disposition. 13. The finding that no activity worth its name was undertaken by the assessee is untenable. This Court has already considered such plea in T.C.(A)No.579 of 2013, dated 27.1.2014 in the case of Director of Income Tax Exemptions, Chennai. V. M/s.Seervi Samaj Tambaram Trust, and held as follows: "9. In the present case also, the Revenue only questions the trust not having commenced its activity for the grant of registration. The provision under Section 12AA of the Income Tax Act does not stipulate such a condition for grant of registration. On the other hand, Section 12AA (1) contemplates satisfaction of the Commissioner about the objects of the Trust and the genuineness of the activities and make such enquiry as may be necessary for the purpose of grant of registration. In so considering the application, the Commissioner has to give an opportunity to the assessee as provided for under proviso to sub-section (1) of Section 12AA. Under sub-section (3) of Section 12AA, the Commiss....