TaxTMI 
TaxTMI 
2015 (12) TMI 693
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....ion for registration u/s 12AA of the Act before the CIT, Faridabad on 19.3.14 accompanied by a copy of the Trust deed and other relevant documents. In order to verify the nature of assessee appellant's objects, the Commissioner issued some questionnaires and replies were filed by the appellant. Ld. CIT, Faridabad, however, held that the applicant trust failed to substantiate its claim that its aims and objects mentioned in the Memorandum of Association are charitable in nature and the appellant could not produce any conclusive evidence to prove the genuineness of the activities of the Trust despite sufficient opportunities accorded to the applicant. Consequently, the CIT, Faridabad rejected the application of the appellant Trust for registration u/s 12AA of the Act. Now, the empty handed appellant is before this Tribunal with the sole ground as reproduced hereinabove. 4. We have heard arguments of both the sides and carefully perused the relevant material placed on record. Learned counsel of the assessee submitted that all objects of the appellant Trust are charitable in nature as per clause (iii) of the Trust deed which also shows that the trust is created wholly for charitable p....
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....ing of the activities of the Trust. He further submitted that there is no rider that the relatives could not be trustees of a trust, however, in the present case, trustees belong to three different families which is clear from their names and addresses reproduced by the CIT himself in para no. 3.1 of the impugned order. To support this contention, learned counsel of the assessee has relied on the judgment of ITAT Ahmedabad in the case of Jupiter Medical Research Centre Trust 128 TTJ (Ahmedabad) (UO) (118) and submitted that even the trustees could be from one family and in the present case, trustees are from three different families. Learned counsel of the assessee also pointed out that in some extraordinary situation, the trust could be dissolved but clause XVI of the trust deed clearly mandates that upon dissolution of the trust, its assets shall be handed over to similar type of registered trust or to the government and shall not be distributed or paid among the trustees. Learned counsel of the assessee also pointed out that as far as the provisions of amendment in the trust deed are concerned, it is proper that trust deed could never be amended. To support this contention, ld. ....
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....ble Supreme Court in the case of Aditanar Educational Institution vs ACIT 224 ITR 310. 11. We have heard the rival submissions and carefully perused the relevant material placed on record, inter alia, impugned order of CIT(A) and judgment/orders relied by both the parties. At the very outset, we note that section 12A of the Act provides conditions for applicability of section 11 and 12 of the Act and section 12AA of the Act provides procedure for registration u/s 12AA of the Act. The provisions of section 12AA of the Act provide that the Commissioner shall call for documents, information and conduct inquiries to satisfy about the genuineness of the activities of the trust or institution and after recording satisfaction about the charitable or religious nature of the objects and genuineness of the trust or institution, CIT will pass an order granting registration u/s 12AA of the Act. It is further provided that if the CIT is not so satisfied, the provisions of section 12AA of the Act require him to pass an order rejecting such application of registration and section 12AA of the Act prescribes and provides the scope and ambit of the inquiry that the commissioner is authorised to car....
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....n favour of the revenue because in that case, the applicant society failed to submit relevant material before the CIT which is not the situation in the present case. Therefore, in view of the decision of Hon'ble Karnataka High Court in the case of Sanjeevamma Hanumath Gowda Charitable Trust vs DIT(E) (supra), we are of the considered opinion that the ld. CIT was not justified in rejecting the application of the assessee for grant of registration u/s 12A of the Act as he considered irrelevant facts and material while rejecting the application of the assessee. Finally, we are of the considered view that as per objects of the applicant trust, if only one activity of running of school for charitable purposes is being undertaken and other activities are not being carried out, then this cannot be a basis of rejection of registration u/s 12A of the Act. So far as the charging of fee is concerned, if appellant trust is charging fees from the students to meet day to day expenses of the school which is in accordance with the prescribed rule of the state educational department, then it cannot be alleged that the applicant trust is earning income from fees beyond the ambit of charitable activi....