TaxTMI 
TaxTMI 
TaxTMI 
2015 (2) TMI 323
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....ppellant craves leave to alter, amend or delete any of the grounds of appeal or add to the same, if deemed necessary. 3. The ground of appeal No.1 raised by the assessee is not pressed. Hence, the same is dismissed as not pressed. 4. The issue raised vide ground of appeal No.2 is against the denial of registration under section 12A of the Act for the reason that clause No.23 of the object clause of the Trust Deed was specifically for the benefit of Jain community and further, the Trust had not commenced its activities as yet. 5. The brief facts relating to the issue are that, the assessee filed an application in Form No.10A for grant of registration under section 12A of the Act. The assessee Trust was set up by Trust Deed dated 03.09.2012. The assessee was called upon to furnish the information regarding the charitable activities carried on by the Trust along with evidence. In reply, the assessee mentioned about its proposed activities and did not say anything about the activities actually carried out so far. The CIT further noted that even though the objects of the applicant Trust were by and large charitable, two objects vide serial Nos.22 and 23 appearing in the object clause....
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....community, the provisions of section 13(1)(b) are clearly attracted. As per section 13(1)(b), the benefit of sections 11 & 12 cannot be extended to a charitable Trust or Institution which has been established for the benefit of any specific religious community or case. When the benefit of sections 11 & 12 cannot thus be extended to the applicant Trust in view of the item (22) of the object clauses, no purpose would be served by granting it registration u/s.12A which is an in-principle recognition of entitlement of such benefits." 7. Further vide para 3.2, the CIT noted that the applicant Trust had not carried out any activities so far and the assessee had not denied the same. The CIT was of the view that when no activities were there, satisfaction regarding the genuineness of the activities could not be found and this issue was also decided against the assessee. The CIT held that the assessee was not entitled to registration under section 12A of the Act as it was adversely hit by the provisions of section 13(1)(b) of the Act. Thus, the assessee's request for grant of registration under section 12A of the Act, was not accepted. 8. The assessee is in appeal against the order of....
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....ssistant Charity Commissioner, Pune Region, Pune. The activities of the Trust as per object clause No.1 was to start Pre-primary, Primary, Secondary, Higher Secondary including Graduation, Post-Graduation institutions, Research Centre, etc. The aim and object of the assessee Trust was to establish and start educational institutions for imparting school and college education, for providing academic, technical, engineering, vocational, sports, professional and social education. Further, educational institutions had to start in the field of business / management studies, engineering, etc. These were the objects of the Trust as per clauses 2 and 3 of the Trust Deed. The assessee had further enlisted several other objects in line with the field of education, vide clauses Nos.22 and 23, which read as under:- "22. To inculcinate spirituality and Jain philosophy of Nirvana and Karma and such parallel philosophies professing Ahinsa and Nirvana through self-purification and scientific methods of living without belief in Tantra, Mantra, Magic and support of any impure means. 23. The Society shall protect the interest of Jain Community as a minority community and for that purpose the objects....
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....stitution has to make an application for registration of the Trust or Institution in the prescribed form and in the prescribed manner before the Commissioner, before the expiry of one year from the date of creation of the Trust or the establishment of the Institution, whichever is later. Such Trust or Institution is to be registered under the provisions of section 12AA of the Act. The procedure for registration is enlisted in section 12AA of the Act, under which, the Commissioner on receipt of an application for registration of a Trust or Institution, shall call for such documents or information from the Trust or Institution as he thinks necessary, in order to satisfy himself about the genuineness of the activities of the Trust or Institution and is also empowered to make such further enquiries as he may deem necessary. The CIT after satisfying himself about the objects of the Trust or Institution and the genuineness of its activities, shall pass an order in writing registering the Trust or Institution and where he is not so satisfied, he shall pass an order in writing refusing to register Trust or Institution. It is further provided under the section that, no order under sub-claus....
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....e. We find no merit in the order of CIT in observing that the said benefit being provided to the Jain community would attract the provisions of section 13(1)(b) of the Act and the assessee therein would not be entitled to the claim of deduction under sections 11 and 12 of the Act and consequently, there was no merit in allowing the registration under section 12A of the Act. The allowability of the deduction under sections 11 and 12 of the Act is to be looked into by the Assessing Officer while completing the assessment in the hands of the assessee at the relevant time. Whether the said deduction under sections 11 and 12 of the Act is allowable or not to the Trust or the Institution by way of non-fulfillment of the conditions laid down in section 13(1)(b) of the Act is to be considered by the Assessing Officer while completing assessment in the hands of the assessee Trust or Institution. But the said violation by the Trust or Institution on account of provisions of section 13(1)(b) of the Act, if any, are not to be considered by the CIT while granting registration under section 12A of the Act. 17. We find similar issue has been decided by the Pune Bench of the Tribunal in Ashoka Ed....
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....he provisions of ss. 11 and 12 is required to apply for registration under s. 12A. The procedure for registration is prescribed in s. 12AA and as per the provisions of sub-s. (1) of that section, the CIT [Director of IT (Exemption) in the present case] is empowered to satisfy himself about the object of the trust and about the genuineness of the activities of the trust or institution before granting the registration under s. 12A. Once the CIT has not doubted the genuineness of the activities of the assessee nor doubted its charitable object, he cannot refuse to grant registration under s. 12A. In the present case, the registration, however, was refused by the Director of IT (Exemption) on the ground that as per the object clause Nos. 3(1) and 3(2), the assessee trust was established for the benefit of people belonging to Vaish community only which was clearly in violation of s. 13(1)(b). However, as held by Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra), an object beneficial to the section of the public is an object of general public utility and to serve a charitable purpose, it is not necessary that the object should be to benefit the whole of ma....
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....e provisions of s. 13. 7. As already noted, the procedure for registration laid down in s. 12AA requires the CIT to satisfy himself about the genuineness of activities and object of the trust or institution and as such, the scope of his powers is limited in this regard to make such enquiries, as he may deem fit, to satisfy himself in respect of these two aspects. As held by Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra), an object beneficial to the section of the public is an object of general public utility and to serve a charitable purpose, it is sufficient if the intention is to benefit a section of the public as distinguished from a specified individual. This decision of Hon'ble apex Court followed subsequently by Hon'ble Allahabad High Court in the case of Surji Devi Kunji Lal Jaipuria Charitable Trust (supra) and in the case of Pt. Ram Shanker Misra Trust (supra) to hold that the expenditure incurred by a trust for the benefit of one community is an expenditure incurred on a public charitable object still holds the field notwithstanding the provisions contained in s. 13(1)(b) since the definition of the term "charitable purpose" gi....
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....me of the assessee of the relevant previous year. The application of s. 13 thus falls within the exclusive domain of the AO and the provisions contained therein can be invoked by him while framing the assessment and not by the CIT while considering the application for registration under s. 12AA". 12. Hence, in our opinion the Ld. Commissioner exceeded her jurisdiction on the said issue also for giving one of the reasons for cancelling the registration of the assessee by exercising the powers u/s. 12AA(3) of the Act. The next objection is in respect of the amendment to the trust deed. There is no dispute about the fact that the assessee trust is registered under the Bombay Public Trust Act, 1950 and all the amendments made to the trust deed were subject matter of the enquiry and scrutiny by the Assistant Charity Commissioner, Ratnagiri which details are given here-in-above. We find that the Ld. Commissioner has given one more reasons that the powers to appoint or remove any trustee is vested in the Chief Trustee only and Ld. Commissioner has further concluded that the assessee trust is like private trust. As per the amended trust deed filed before us in our opinion the Ld. Commissi....
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....ssee was a religious trust, the provisions of section 13(1 )(b) would not be applicable, because the same are applicable I to the case of the trust established for charitable purposes. There was no error in such a conclusion of the Tribunal [Para 17] In the instant appeal, the Tribunal had found as a fact after analyzing the objects of the trust that the assessee was a public religious trust and its objectives were solely religious in nature. [Para 19] In view of the aforesaid analysis, the appeals were to be dismissed. [Para 20]" 20. The Hon'ble High Court of Madhya Pradesh in CIT, Ujjain v. Dawoodi Bohata Jamat (supra) had upheld the finding of Tribunal that since the assessee was a religious Trust, provisions of section 13(1)(b) of the Act would not be applicable. However, in the facts of the present case, there is no finding of the CIT that the assessee was a religious Trust, but the objection of CIT was that the Trust was created for the purpose of particular community. 21. On the other hand, the learned Authorized Representative for the assessee, had relied upon the ratio laid down by Hon'ble Allahabad High Court in Hardayal Charitable & Educational Trust v. CIT....
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....e true that even if the activities of the trust have not commenced, if the Commissioner has sufficient material in his command, he may still come to the conclusion that he is not satisfied about the objectives of the Trust or the genuineness of its activities. We understand the decision of the Tribunal accordingly. 6. In the present case, however, merely on the ground that the activities of the Trust had not commenced, the Commissioner was persuaded to reject its application for registration, which in our opinion, was not appropriate and therefore, rightly interfered by the Tribunal." 5. As can be noted in the instant case also, for availing benefits under Sections 11 and 12, the Trust made an application under Sections 12A for registration u/s. 12AA before the Director of Income-tax (Exemption). It also further emerges that Commissioner since is required to call for documents and information from the Trust if he deems it necessary in order to satisfy about the genuineness of the activities of the Trust, he, in this case also, made such inquiries. After duly satisfying himself about the objects of the Trust and genuineness of the activities, he is required to grant registration....