2017 (11) TMI 1006

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.... as per the Memorandum of Association of the Society are as follows :- a) To acquire, establish, start, aid, run, maintain or manage educational institutes, libraries for the benefit of the public. b) To arrange and organise lectures, debates, discussions, seminars & excursions for the diffusion of knowledge. c) To publish or cause to be published useful literatures, magazines, etc. without profit motive. d) To study, cultivate and demonstrate the art of music and dancing. e) To promote and encourage advancement of literary, cultural, political, religious & scientific education. f) To help the needy students of all communities for the prosecution of studies. g) To help the aged, sick, helpless and indigent persons. h) To work for the happiness of the down trodden needy people for their primary needs such as food, cloth, education and shelter etc. i) To import and develop social awareness among the illiterate women and men by organising awareness camps from time to time'. j) To organise an ambulance for free rendering service to the needy patients. k) To establish and maintain basi....

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.... expenses by providing medical facilities and paying fees to the doctors, giving medicines and providing spectacles. The AO noticed that payment to the doctors and staff, incurring of medical expenses as also purchase of spectacles had been made paid for by another charitable trust M/s Bimla Devi Bhutoria Charitable Trust. The said trust made payments directly to the doctors and staff and for purchase of spectacles. This trust however confirmed that those payments were in the form of donation by them to the Assessee trust. According to the assessee also the payments made by M/S.Bimla Devi Bhutoria Charitable Trust were accounted by it as donations. The Assessee did not open a Bank Account till 26.12.2016 and therefore the Assessee requested donations be made by payments directly for meeting expenses of the Assessee trust. It was the case of the assessee that it had opened a bank account only on 26.12.2016 and prior to this period they were making a request to the donors to meet the expenses of the assessee in lieu of donations directly to the assessee. M/s. Bimla Devi Bhutoria Charitable Trust had also confirmed the aforesaid facts. The CIT(Exemption), Kolkata was of the view that ....

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.... grant of registration u/s 12AA of the Act is that the trust or institution which is yet to start any charitable activity cannot be granted registration u/s 12AA of the Act on the basis of its objects which are charitable in nature. It is thus clear that the CIT(E) was satisfied with the objects of the assessee which were charitable in nature. Though the CIT(E) has made reference to the assessee's action of having met its expenses for doing charitable activities by directing the donors to meet all these expenses directly, yet the CIT(E) has not drawn any adverse inference against the assessee in this regard. 9. The ld. Counsel for the assessee filed before us several decisions of the High Courts in which a view has been taken that at the time of grant of registration it is not proper to insist on charitable activity having been already carried out by the society or charitable institution seeking registration. This view has been taken by the Hon'ble Delhi High Court in the case of D.I.T. vs Foundation of Opthalmic & Optometry Research Foundation Centre in IT Appeal No.1687 of 2010 dated 16.08.2012 and the decision of Hon'ble Allahabad High Court in the case of CIT(E) vs M/s. S.M.....

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....mmenced the charitable or religious activity. Any enquiry of the nature would amount to putting the cart before the horse. At this stage, only the genuineness of the objects has to be tested and not the activities, which have not commenced. The enquiry of the Commissioner of Income-tax 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 of the Act 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. 2. The ITAT has held that in view of the judgment of the Division Bench of this Court in Hardayal Charitable & Educational Trust case (supra), the order of rejection by the Commissioner was contrary to the law as laid down. Moreover, the Commissioner did not raise any issue about the objects of the trust which the Tribunal found are clearly charitable in nature. Thus, the only ground which weighed with the Commissioner in declining to grant registration has been found to be contrary to law. The Tribunal has in the c....