TaxTMI 
TaxTMI 
2006 (5) TMI 62
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.... issued under section 80G of the Income-tax Act, 1961, and has directed petitioner No. 1 (the assessee-trust) not to use the said renewals while accepting donations from the public and to clarify in writing that donations given to the said trust are not entitled to deduction under section 80G. The facts leading to the impugned order are that one Smt. Rajwati Bhatnagar (hereinafter referred to as the "settlor" of the trust), executed an unregistered trust deed dated March 15, 1991. A copy of the trust deed is enclosed as annexure 1 to this writ petition. By that document, a sum of Rs. 1,101 (rupees one thousand one hundred one only) was contributed and converted by the "settlor" into a public charitable trust described to be wholly for ch....
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....ed persons during and after natural calamities like famine, earthquakes, floods, draughts, etc. (viii) To help indigent, poor and helpless families, individuals and persons. (ix) To start community, recreational, health, devotional and other centres of general public utility and also to arrange and manage medical camps for any kind of diseases, for the benefit of the public, (x) To assist in or to provide and create job or employment opportunities for the poor, handicapped and females. (xi) To formulate plans, schemes and programme for rural development and execute the same for the welfare of the rural community, (xii) To formulate and carry out schemes and programmes for the benefit of the society especially for the benefit ....
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....two new objects were included, which were not there in the objects of the earlier trust. These new objects are: "1. To establish, run ... medical, dental and nursing colleges ... 2. To open, run schools and hospitals and other institutions in villages and to provide the villages with basic needs and services." It may be mentioned here that strong and vehement arguments have been advanced in an attempt to establish that the second trust deed of 1995 is merely a slight modification of the original trust of 1991. To meet the objections of this court that after creating a trust the "settlor" is divested of the ownership of the corpus of the trust, which vests in the trustees and, therefore, the "settlor" loses the right of dealing with....
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....nly inference possible from the trust deed of 1995 is that a second trust of an equal amount of money, i.e., Rs. 1,101 was created by the "settlor" of the first trust into a second trust unlinked with the first trust except by similarity of name. Coming back to the facts, it is not disputed that the second trust of 1995 was never registered under section 12A of the Income-tax Act and no exemption was granted under section 80G in respect of the second trust. This second trust started running a medical college where huge donations running into crores of rupees were obtained by the trust. The Commissioner of Income-tax has written a very detailed and well reasoned order pointing out the undue advantage taken by similarity of names of the....
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....order. We, further direct that if registration under section 12A is granted to the 1995 trust, it will be open to that second trust to apply for exemption under section 80G and, if such exemption is sought along with a certified copy of this order and after completing necessary formalities, the concerned authority will consider by a reasoned order within two months of the date when the petitioner has applied after completing the formalities whether to grant or refuse the exemption. Learned counsel for the petitioner has submitted relying upon Explanation 2 to section 80G(5C) that the impugned cancellation order of the Commissioner should not affect the past donations, which may have been advanced to the trust relying upon renewals of ....