TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 976
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.... 2. The brief facts of the case as submitted by the learned authorised representative are that the assessee is a trust constituted by a trust deed dated January 12, 2012, filed application Form No. 10A on March 1, 2012 seeking registration under section 12AA of the Act. It submitted before the learned Director of Income-tax (Exemptions) that the assessee-trust had not started its activity and the bank accounts are yet to be opened. Based on these submissions, the learned Director of Income-tax (Exemptions) arrived at a conclusion that since the assessee-trust had not started its activities, it is not entitled to registration under section 12AA of the Act. The learned Director of Income-tax (Exemptions) further came to a conclusion that sinc....
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.... and therefore, requested that the orders of learned Director of Income-tax (Exemptions) may be upheld. 5. We have heard both parties and carefully perused the materials available on record. The learned authorised representative had relied on the decision of the following cases : (i) Hardayal Charitable and Educational Trust v. CIT [2013] 355 ITR 534 (All) * At the time of registration under section 12AA which is necessary for claiming exemption under sections 11 and 12, the Commissioner is not required to look into the activities, where such activities have not commenced or are in the process of its initiation. Where a trust, set up to achieve its objects of establishing educational institution, is in the process of establishing such i....
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....s was the expenditure of the trust for charitable and religious purposes will be examined at the time of examining the return. (para 22) * In the result the Income-tax appeal is allowed. (para 23) (ii) DIT (Exemptions) v. Meenakshi Amma Endowment Trust [2013] 354 ITR 219 (Karn) * The trust was formed on January 23, 2008, and within a period of nine months they had filed an application under section 12A for issuance of the registration claiming exemption. The fact that the corpus of the trust is nothing but the contribution of Rs. 1,000 by each of the trustees as corpus fund goes to show that the trustees were contributing the funds by themselves in a humble way and were intending to commence charitable activities. It is not even the ca....
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....xemptions) [2006] 285 ITR 327 (Karn) (page 328) : * Section 11 of the Act deal with exemptions available to income from property held for charitable or religious purposes. Exemption from tax will be allowed only in respect of the income actually applied to the purposes of the trust. Income derived for trust property must be determined on commercial principles. In order to be eligible for the aforesaid exemption the assessee has to get the trust registered under section 12A of the Act. The assessee has to make an application in the prescribed form and comply with the other legal requirements mentioned in the aforesaid section. On receipt of such application for registration the Commissioner is under an obligation to follow the procedure pr....
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....applied to charitable or religious purpose and not the nature of the activity by which the income was derived to the trust. (para 6) * Sub-section (3) of section 12AA of the Act provides that where a trust or an institution has been granted registration under clause (b) of sub section (1) and subsequently the Commissioner 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, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution. Therefore, sufficient safeguard is provided under the Act for cancellation of registration obtained by the assessee, in the event of its misusing....
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....invest the surplus amounts of the trust funds, if any, in investments permitted under the Income-tax law. (f) To provide on a quarterly basis report to the settlor giving details of the business and activities of the trust, including information regarding customer database, nature of complaints/enquiries/ suggestions/redressal steps, etc ; (g) Display prominently the name of ICICI Bank as the settlor of the trust on the centres, brochures, pamphlets, advertisements, website and all other modes of external communication ; (h) Such other purposes as may be decided by the trustees in consultation with the advisory council (which shall include anything incidental and ancillary to the functioning of the trust and the objects stipulated herein....