2006 (3) TMI 91

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....learned counsel for the parties. The appellant claims to be a charitable trust established by a deed of trust dated March 1, 1997. The said deed of trust sets out the purpose and object for which the trust was created. The appellant-trust constructed a building which was completed in the year 2001. Thereafter, it applied for registration under section 12A of the Income-tax Act, 1961 (for short hereinafter referred to as "the Act") to the income-tax authorities for registration as charitable trust to enable it to claim exemptions under the Act. In the impugned order dated June 24, 2002, the Director of Income-tax (Exemption) rejected the request of the appellant on the ground that it is carrying on its activity by letting out the marri....

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.... receipt of such application for registration the Commissioner is under an obligation to follow the procedure prescribed under section 12AA before he grants or refuses registration. What he is expected to do on receipt of such an application is, he shall call for such documents or information from the trust in order to satisfy himself about the genuineness of the activities of the trust or institution. In addition to securing information in the aforesaid manner, it is open to the Commissioner to make such enquiries as he deems necessary in this behalf. Having regard to the scheme of sections 11, 12 and 13 ultimately what the Commissioner has to look into is not the source of income to the trust but whether such income is applied for charita....