TaxTMI 
TaxTMI 
2014 (9) TMI 951
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....see to produce original trust deed for verification. In response to the query raised by the Director of Income-tax (Exemption), the appellant-trust furnished required information. The Director of Income-tax (Exemption) after examining the trust deed, noticed that primary object of the trust is creating awareness amongst the general public about right to health and assisting them in this regard. It was submitted by the assessee before the Director of Income-tax (Exemption) that the aforesaid object would fall under the ambit of advancement of any other objects of general public utility as envisaged under section 2(15) of the Act. The Director of Income-tax (Exemption) noted that in response to query No. 2 of the questionnaire issued, requiring the trust to furnish information with regard to its activities, the trust had merely stated that it has started its activities. Subsequently, trust furnished photo copy of certain press release stated to be issued on April 17, 2013 in that regard. On going through the submissions of the assessee and documents filed, the Director of Income-tax (Exemption) was of the view that the assessee-trust was not able to establish its claim about carrying....
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....rust vide trust deed dated March 20, 2013 it had made application for registration before the Director of Income-tax (Exemption). Therefore, within such a short period, it cannot be expected that the assessee will be undertaking activities in large scale. However, it was submitted that the assessee in fact commenced its activities by holding awareness programmes and other related activities, though, in a small scale. In this context, the learned authorised representative referred to the press release dated April 17, 2013. The learned authorised representative submitted that in the said press release, the assessee has exposed various frauds committed in the health sector to create awareness amongst general public. So far as the Director of Income-tax (Exemption)'s objection with regard to carrying on of trade and business activity by the trustees, the learned authorised representative submitted that if the trade and business activities are for the purpose of or to supplement achieving of the main object of the trust carrying on of such trade and business activity is legally permissible. In this context, the learned authorised representative relied upon the decision of the Income....
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....that commencing of activities is not the sole criterian to ascertain genuineness of the activities. As can be seen, the trust was created in March, 2013 and it applied for registration in June '13. Therefore, within a span of three/four months, it cannot be expected that the trust will be undertaking activities on a large scale. Moreover, it appears from the materials on record that the trust in fact has undertaken certain activities though on a limited scale, to generate/create awareness amongst the general public with regard to fraud committed in the health sector. In this view of the matter, it cannot be said that the trust has not commenced its activities. Further, it has to be noted that trust or institution is not prohibited from carrying on of any activity of commercial nature if such commercial activity is intended for achieving the objects of the trust. In this context, we rely upon the order of the coordinate Bench in the case of Kusumba Dhirajlal Parekh and Lila Nautamlal Parekh Foundation wherein it is held as under : "7. So far as the first reason for rejecting the assessee's ....
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.....' 8. Similar view has also been expressed by the hon'ble Karnataka High Court in the cases of DIT (E) v. Meenakshi Amma Endowment Trust [2013] 354 ITR 219 (Karn) and Income-tax Appellate Tribunal, Delhi Bench in the case of Dharma Sanstapak Sangh (Niyas) v. CIT [2008] 118 TTJ (Delhi) 823. Therefore, the conclusion of the Director of Income-tax (Exemption) to the effect that since the assessee has not commenced its activities, registration under section 12A will not be granted is not the correct view. So far as the conclusion of the Director of Income-tax (Exemption) that the assessee is having mixed objects hence, registration cannot be granted. In our view, such conclusion is also not correct as there is no such restriction under the relevant pro visions of the Act which could suggest that a trust having religious activity is not eligible for exemption. The hon'ble Madras High Court in the case of New Life in Christ Evangelistic Association v. CIT [2000] 246 ITR 532 (Mad) has held that at the stage of grant of certificate under section 12A of the Act, the only enquire which could possibly be made would be whether the s....
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....opportunity of being heard to the assessee and allow the assessee to explain whatever doubt the Director of Income-tax (Exemption) might be having, which, according to him, puts restriction in granting registration under section 12A of the Act. The Director of Income-tax (Exemption) shall decide the issue after considering all the submissions of the assessee and also taking into account the decisions which the assessee may rely upon in support of his claim. With the aforesaid direction, the appeal of the assessee is allowed for statistical purposes." 6. So far as Director of Income-tax (Exemption)'s observation with regard to violation of provision contained under section 11(1)(d) of the Act is concerned, on going through the said provision, we are of the view that the observation made by the Director of Income-tax (Exemption) is not only irrelevant but is also misplaced. Furthermore, if there is any violation of the provision contained under section 11, the same can be looked into by the Assessing Officer while examining the assessee's claim under section 11 of the Act in the course of assessment proceeding. At the time of grant of registration under section 12A of the Ac....