TaxTMI 
TaxTMI 
2015 (11) TMI 299
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....I.T. Rules, 1962 on 13.3.2014, for grant of registration u/s 12AA of the Act. The Ld.CIT, Ghazaibad rejected the said application on the ground that the assessee trust has not taken any steps in pursuance of its aims and objects, except acquisition of land and hence the genuineness of the activities of the Trust cannot be verified. He also stated that the evidence brought on record to show the capacity of the lenders who have advanced loans to the assessee trust, are not sufficient. Hence he rejected the application for grant of registration u/s 12AA of the Act, by concluding that the registration cannot be granted to the Trust at this stage. 3. Aggrieved the assessee is in appeal before us on the following grounds. 1. Whether the learned CIT, Ghaziabad was justified to reject the application for registration U/S 12A of the applicant assessee Trust, In spite of submitting all required facts / evidences. 2. Whether the learned CIT, Ghaziabad was justified to reject the application for registration U/S 12A of the applicant assessee Trust on the basis of recording the fact that non verification of genuineness of the activities while in fact applicant assessee Trust have produ....
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.... land" is not legally tenable. This ground taken by the Ld.CIT for refusal of registration is not correct for the reason that: (i) The assessee had commenced activities by acquiring land. It was also pointed out that the State Government had exempted the assessee trust from payment of stamp duty on purchase of land, in view of the charitable aims and objectives of the Trust. (ii) Even otherwise, it is well settled that at the stage of grant of registration, the non-commencement of the activities by the Trust cannot be a ground for refusal of registration u/s 12AA of the Act. The above propositions are covered by the following judgements. (a) In the case of CIT, Varanasi vs. Varanasi Welfare Trust, Varanasi in ITA no. 227 of 2014 dt. 12.11.2014 the Hon'ble Allahabad High Court held that : "The CIT, Varanasi rejected the application for registration u/s 12AA of the Act and consequently for the grant of approval u/s 80G(5)(vi) of the Act on the ground that the assessee had not filed material in relation to the activities of the Trust since its inception. In view of the Commissioner, merely expressing an intention to conduct a charitable activity, was not sufficient t....
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....e that the DIT(E) has not pointed out any defect or doubt about the charitable objects of the assessee trust. From the impugned order, we clearly observe that the DIT(E) has rejected the application of the assessee trust for grant of registration u/s 12A of the Act by holding that in absence of any genuine charitable activity, the genuineness of the charitable activities cannot be held to be established. At the same time, we observe that as per ratio of the decision of Hon'ble Jurisdictional High Court of Delhi in DIT vs. Foundation of Ophthalmic & Optometry Research Education Centre, registration u/s 12A is not dependent on commencement of charitable activity. The registration granting authority is not required to examine the question whether the trust has actually commenced and carried on its charitable activities. We also take cognizance of decision of Hon'ble High Court of Allahabad in the case of CIT vs. RS Bajaj Society (supra) as relied by the assessee, wherein their lordships held that at the time of registration only genuineness of the objects was to be tested, not the activities which were not commenced by that time. In view of above, we hold that the DIT(E) rejected t....
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....e included in computing the total income of any person. Therefore, the provisions of sections 11, 12 or section 10(23C) deal with the income of a trust or of the institution and the circumstances as to when such income is to be excluded for computing the total income, but the basis of such benefit is the registration under section 12AA. Unless a trust or institution is registered under section 12AA, such trust or institution shall not be entitled to exclude from its total income, deductions or contributions or from other sources. Therefore, the principles laid down for excluding the income from consideration under section 10(22) now 10(23)(C) or sections 11 and 12 are not applicable while considering the application for registration under section 12AA. The application for registration is required to be made within one year of the creation of the trust. Section 12AA requires satisfaction in respect of the genuineness of the activities of the trust, which includes the activities which the trust is undertaking at present and also which it may contemplate to undertake. The insertion - of sub-section (3) to section 12AA clarifies the said fact, when it empowers the Commissioner to cance....