TaxTMI 
TaxTMI 
2012 (12) TMI 1031
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....section 12A of The Income Tax Act 1961 filed by the Appellant which is an Educational Trust and that too without giving adequate opportunity of being heard and on the basis of such considerations which are not germane to the issue before him.' (2) In any view of the matter and in any case, action of the learned CIT in refusing the registration under section 12A is bad in law and against the facts and circumstances of the case and is contrary to the principles of natural justice, and the Appellant ought to have granted registration under that section.' (3) The appellant carves leave to amend, alter or delete any of the above grounds of appeal." 2. Assessee-Trust made an application for registration u/s. 12A of the Income Tax Act, ....
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.... He found that loans in excess of Rs. 20,000/- had been received from several parties in F.Y. 2009-10 in violation of section 269SS of the Act. He discussed other accounting irregularities of the assessee for the FY.2008-09.He further observed that tuition fee of Rs. 53,000/- was being charged from every candidate in the Bachelor of Architecture course, that total fee charged per student was Rs. 1,09,000/- per annum. He was of the opinion that fees charged by the assessee was substantial, that trust did not have any academic credentials. Finally he held that the institution was not being operated wholly for educational purpose but for commercial purpose. 4. Before us, during the course of hearing, Authorised Representative (AR) of the asse....
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....letely mis-placed while deciding the issue of registration, that objectives of educational development were duly incorporated in the approved deed, that application of the Trust was rejected on the basis of extraneous consideration. He relied upon the cases of DIT v. Garden city Educational Trust [2011] 330 ITR 480 (Ker.); Sanjeevamma Hanumanthe Gowda Charitable Trust v. DIT [2006] 285 ITR 327 (Kar); CIT v. Red Rose School [2007] 163 Taxman 19 (All.); Dream Land Educational trust v. CIT [2008] 166 Taxman 27 (ASR) (Mag.); St. George Educational Trust v. DIT (Exemption) [2006] 9 SOT 636 (Bang); and Aryan Educational Society v. CIT [2005] 93 ITD 546 (Delhi) Departmental Representative (DR) relied upon the order of the CIT-III, Nagpur. 6. We h....
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....ed from the trust property is applied to charitable or purpose and not the nature of the activity by which the income was derived by the trust. In other words while deciding the issue of registration/ cancellation of a charitable trust/institution what the CIT has to look into is not the source of income to the trust, but whether such income is applied for charitable purposes. The satisfaction of the CIT should be regarding the application of the income of the trust for the afore-said purposes which only entitles the assessee to claim exemption. For arriving at such satisfaction primarily he has to look at the object of the trust, when the same is reduced into writing in the form of trust deed. In our opinion, whether part of the income is ....
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....of the object of the trust or not, is to be carried by the AO while making the assessment of each year. But, so far as the registration of a trust is concerned, the CIT has to examine whether the object of the assessee falls within the definition of 'charitable purpose' under section 2(15). 6.3 We are of the opinion that at the stage of considering grant of registration u/s. 12A to a charitable trust in accordance with procedure laid down in s. 12AA, the CIT is only to examine the genuineness of the objects of the Trust and not the application of income for charitable purposes which can be examined at the stage when the Trust files its return. AR has rightly emphasised that none of the objects was against public policy and the main....