TaxTMI 
TaxTMI 
2017 (2) TMI 697
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....acts of the case are that the assessee filed application for grant of registration under section 12AA of the Income Tax Act. The assessee furnished details called for on the matter. The CIT (Exemption) noted that the Trust Deed evidences a declaration from the Chairman regarding payment of Rs. 11 lacs for the purpose of the trust property evident from the deed. The same, however, has not been reflected in the bank accounts. The aims and objectives of the trust have been narrated in 21 points but main aim apparently is to start educational institution where course in engineering, technical, medical, management etc. will be taught. In addition, there is a proposal to run a hospital also. In order to corroborate the work being done by the trust vis-à-vis the stated objectives, some photographs have been appended wherein medical aid is shown being provided to people. It is mentioned the photographs pertain to June, July and October, 2015. On inquiry, assessee submitted that voluntary medical services have been provided to redeem its charitable objectives and that trust is in the process of opening of a school and hospital for downtrodden class. However, the predominant purpose o....
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.... The OD limit has not been closed. Apparently, the assessee had taken OD limit for purchase of lands but after sanction of the OD limit from PNB Baddi, this amount has been more or less kept as unutilized. 4. The balance sheet ending 31.03.2016 was reproduced in the impugned order. The ld. CIT also noted that the corpus fund shown by the assessee on 18.10.2015 was Rs. 3.11 Crores which have been increased to Rs. 6.66 Croes as on 31.03.2016. The OD limit from PNB Baddi had outstanding balance of Rs. 3,77,95,902/- as on 18.10.2015 which have been nullified and is not reflected in the balance sheet. The explanation from the assessee in this regard was that once the lands were purchased from following the balance available with PNB Baddi and the corpus donation received in the intermittent period was utilized for payment to PNB Baddi and ultimately, OD limit was nullified. The corpus fund has been shown to have been received from various persons whose names were pro vided through the initial reply. There was no address and PAN number provided. Individuals in their confirmation have explained to have contributed for corpus and PAN numbers of some of them were also filed. The ld.CIT, ho....
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....ee trust are apparently seemingly not intended to benefit the public at large and to that extent, the stated aims and objectives of the trust remained to be ostensible and not convincing at all. The registration application was, accordingly, rejected. The assessee is in appeal. 6. We have heard ld. Representatives of both the parties and perused the material on record. The ld. counsel for the assessee submitted that the Trust Deed clearly show that the settler has given a sum of Rs. 11 lacs for the trust property which is deposited in the bank account, copy of the bank account is filed at page 26 of the Paper Book. Therefore, finding of the CIT is factually incorrect that the amount of Rs. 11 lacs have not been reflected in the bank account of the assessee. He has further submitted that the CIT has admitted in the impugned order that aims and objectives of the assessee are charitable in nature because assessee's main objects are to run and manage educational institution in various fields and to run hospital and other educational activities. Copy of the Trust Deed is filed at page 7 of the Paper Book. The ld. counsel for the assessee further submitted that purchase of land is t....
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....nd not current assets. The voluntary donation is used to make day-to- day expenses or to run the activities of the trust in ordinary course. 7. The ld. counsel for the assessee relied upon decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs B.K.K. Memorial Trust 256 CTR 424 in which it was held as under : The Trust was created on 23.6.2010 and application under Section 12A(1) (aa) of the Act was moved on 19.7.2010 and the same was rejected on 26.11.2010. The application for registration is required to be made within one year of the creation of the Trust and there is no requirement that the Trust or the institution should have started all its envisaged activities in the first year itself. Under Section 12AA of the Act satisfaction regarding the genuineness of the activities of the Trust is to be seen and the stage for application of income is yet to arrive i.e. when such Trust or Institution files its return. Thus the contention that Trust was not set up for charitable purposes and it was utilizing its income not for the said purpose cannot be examined at this stage as only objects of the Trust had to be considered by the Commissioner. The Trust was in nasce....
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.... received were missing cannot form basis of rejection of registration under s. 12AA. 7(iii) Decision of ITAT Chandigarh Bench in the case of Shri Gurudas Educational Trust Vs CIT 177 TTJ 25 in which it was held as under : Genuineness of the activities of the Trust has to be seen keeping in mind the objects of the Trust. The Ld. CIT has to satisfy himself about the fact that the activities are genuine and in consonance with the objects of the Trust. The enquiry regarding genuineness of the activities cannot be stretched beyond this. 7(iv) On the other hand, ld. DR relied upon impugned orders and submitted that assessee is not entitled for registration. 8. We have considered rival submissions. The assessee has filed copy of the Trust Deed which clearly revealed that the aims and objectives of the assessee trust are to run and manage educational institution and to run hospitals and dispensaries etc. Therefore, the main aims and objectives of the assessee trust are charitable in nature. Even this fact is not denied by the CIT (Exemption) in the impugned order. The CIT noted that the amount of Rs. 11 lacs have not been reflected in the bank account. However, the bank account of t....
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.... genuineness of the objects has to be tested and not the activities, which have not commenced. The enquiry of the Commissioner at such preliminary stage should be restricted to the genuineness of the objects and not the Activities unless such activities have commenced. The trust or society cannot claim exemption, unless it is registered under Section 12AA and thus at that such initial stage the test of the genuineness of the activity cannot be a ground on which the registration may be refused. Held, allowing the appeal, (i) that it was not denied that for the subsequent year the assessee had been granted exemption under section 12AA and had also been approved under section 80G, subject to certain conditions. If the Commissioner was satisfied with the genuineness of the objects of the trust for the subsequent assessment year, the refusal of the registration for the preceding assessment year 2011-12 was not justified. (ii) That the question of exemption from application of income received by way of donation was a separate issue and which may be required to be considered, when the return was filed by the trust and was examined by the Income-tax Officer. The question as to whethe....