TaxTMI 
TaxTMI 
2014 (7) TMI 1259
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....ted serious error by invoking the amended section 2 (15) of the Income-tax Act. 1961 (hereinafter referred as "the Act') which was not in existence in the year under consideration for which the appellant has filed the application for grant of registration u/s 12A of the Act and for that matter the order of the learned Commissioner of Income-tax is liable to be quashed. 4. That, the learned Commissioner of Income-tax has committed serious error by citing the activities conducted by Orissa Cricket Association which is nothing to do with the activities of the appellant and for that matter the refusal to grant registration u/s 12A of the Act is a case of non-application of mind and is based on preconceived notion and therefore is liable to be quashed. 5. That, the learned Commissioner of Income-tax has committed serious error by examining the matters subsequent to filing of the application and thereby refused to grant the registration which is contrary to the order of Hon'ble High Court of Orissa in the case of Srikhetra A.C. Bhakti Vedant Swamy Charitable Trust vrs ACIT and another [2006 (2) OLR 75] and for that matter the order of refusal to grant the registration u/s 12A of the ....
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....author, founder of the trust or the persons interested within the meaning of said section and for that matter the conclusion based on such irrelevant appreciation of facts and law is liable to be quashed. 12. That, the earned Commissioner of Income-tax has committed serious error by mentioning that the actual contribution of the association for the development of any sports and games to the standard of Olympic games has never been materialized in the last six decades which is highly uncalled for and for matter the rejection of application u/s 12AA of the Act is liable to be declared is a case of non-application of mind and the application for registration is to be allowed u/s 12A of the Act. 13. That, the learned Commissioner of Income-tax has not considered the CBDT instruction and 10(23)(C) application wherein the appellant's activity has been considered and accepted as genuine one and for that matter the denial of registration by the learned Commissioner of Income-tax is a case of nonapplication of mind and is liable to be allowed. 2. The brief facts of the case are that the Assessee Association is registered under the Societies Registration Act, 1860 w.e.f. 8.1.1947. ....
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....s of Olympic Games has never materialized in the last 6 decades. PARA - 46 From the sum total of such Instructions/guidelines/circulars when applied to the factual matrix of the functioning of the association-inferences can be drawn that the activities of the association neither resulted in any charity as understood in a common sense nor can be categorized as activities for charitable purpose as defined in the section 2(15) of the Income Tax Act, 1961. PARA - 47 CONCLUSION On the totality of the facts and circumstances of the case the application claimed to have been pending and not disposed off from April, 1997 onwards is hereby dismissed ab initio and the Orissa Olympic Association is considered not to be involved in any charitable activities in true sense of the term." 3. The ld. AR contended that the CIT must have disposed off the application within 6 months and should not have kept it pending otherwise registration will be deemed to have been allowed. Reliance was placed in this regard to the provisions of Sec. 12AA(1)(b). Our attention was drawn towards the objects of the Association, a copy of which is available at pg. 2-37 of the paper book, and it ....
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....d the following written submission : "The first ground of appeal is that the order of the Ld. Commissioner of Income-tax, Cuttack is illegal, arbitrary, without jurisdiction and for that matter the order of the Ld. Commissioner of Income-tax is liable to be quashed and/or annulled. It is submitted that, this is a general ground and no reason whatsoever is given why and how the order of CIT, Cuttack is illegal, arbitrary and without jurisdiction. 2. The second of appeal is that the Ld. Commissioner of Income-tax has exceeded in his jurisdiction by examining the accounts of the appellant for the financial year 2001-02 to 2008-09 and coming to an irrelevant and absurd conclusion in refusing to grant the registration to the appellant and for that matter the order of the Ld. CIT being illegal is liable to be quashed. It is submitted that, It is clear from the order of the CIT Cuttack dated. 22.03.2010 that the assessee for the first time had filed an application for registration u/s 12AA of the Income Tax Act 1961 (hereinafter called "the Act') claiming the status of a Charitable Institution with CIT, Cuttack in April 97. Since registration is to be granted, if the assessee fulf....
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....utility"shall not be a charitable purpose if it involves the carrying on of following activities: (a ) any activity in the nature of trade, commerce or business or, ( b ) any activity of rendering of any service in relation to any trade, commerce or business, for a fee or cess or any other consideration, irrespective of the nature of use or application of the income from such activity, or the retention of such income, by the concerned entity". it has been stated in the CBDT's Circular No. 11 of 2008, dated 19th December, 2008 (reported in 308 ITR (St.5) that an entity with a charitable object, inter alia, consisting of advancement of any object of general public was eligible for exemption under section 11 of the Act. "However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of "charitable purpose". Therefore, section 2(15) was amended vide Finance Act, 2008, by adding a proviso.". Further, para 3 of the said circular read as "The newly inserted proviso to section 2(15) will a....
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....the Ld. Commissioner of Income-tax has committed no error by citing the activities conducted by Orissa Cricket Association. In fact the statement of the Ld.AR that the activities conducted by Orissa Cricket Association have got nothing to do with the activities of the appellant is not correct because as could be seen from Para- 22 of 12AA(1)(b)(i) order of the CIT Cuttack dated 22-3-2010 it is stated that "The activities of the Orissa Olympic Association as put forth by the Ld. Counsel in writing in the petition dated 27.01.2010 comprising of carrying on the activities of Olympic movements/Amateur sports regulation and encouragement of various games and sports relating to Hockey, volley ball, Basket ball, Football, Cricket, Tennis, Table tennis, Badminton, Swimming, Atheltics, Wrestling, Kabadi, Weightlifting, Gymnastics, Boxing, Cycling, Kho Kho, Judo, Rifle Shooting, Archery and Hand ball etc., essentially mean various activities in different games."Further the Commissioner of Income-tax at para 37 noted that the Orissa Cricket Association has some sort of arrangement with Orissa Olympic Association to add civil constructions and various infrastructure relating to cricketing acti....
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.... On behalf of the Orissa Cricket Association the authorized representative Sri Diganta Das, Advocate had appeared and submitted a written clarification to the questionnaire issued by the Commissioner of Income Tax, Cuttack on 27.01.2010. As could be seen from the above, the CIT Cuttack before passing his order u/s 12AA dated 22.03.2010 gave opportunity and a reply has also been filed by the authorized representative. Hence the statement of the assessee's counsel that CIT used the material behind the back of assessee without giving opportunity of being heard is not correct. 7. The seventh ground of appeal is that, the Ld. Commissioner of Income-tax is illegal, arbitrary and without jurisdiction by incorporating the materials found during the course of survey conducted u/s 133A of the Act on 28.03.2006 which is nine years subsequent to the application filed by the appellant and for that matter the Ld. Commissioner of Income-tax has exceeded in his jurisdiction by examining the matter not relating to the period for which the application for registration has been filed. It is submitted that, the Hon'ble High Court of Odisha in the case of M/s Srikhetra, A.C. Bhakti-Vedanta Vs. AC....
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....ase the application claimed to have been pending and not disposed off from April, 1997 onwards is hereby dismissed ab initio and the Orissa Olympic Association is considered not to be involved in any charitable activities in true sense of the term." In view of the above, when the Commissioner is examining an application for registration in the year 2010, he has to examined the material before him and the CIT did well in incorporating the materials found during the course of survey conducted u/s 133A of the Act on 28.03.2006 which is nine years subsequent to the application filed by the appellant 8. The eighth ground of appeal is that, the Ld. Commissioner of Income-tax has committed serious error by not considering that the appellant's activity includes education of sports and for that matter the activities of the appellant is coming within the restricted meaning of education u/s 2 (15) of the Act and not with wider meaning i.e. advancement of any other object of general public utility. It is submitted that, the Hon'ble Supreme Court in the case of Sole Trustee, Loka Sikshana Trust Vs. CIT (SC) 101 ITR 234 has given a restricted meaning to education in the sense in which the ....
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....uest house are reflected at Rs. 3,83,92,323.00 as on 31.03.2009 whereas the sum total of movable assets is shown at Rs. 25,67,100.00. Over the last 10 years period the only activity the Orissa Olympic Association has broadly done is commercial exploitation of its immovable property in the form of Barabati Stadium, Shop complexes No.1 & 2, Bank building complex, ticket counters, self constructed building, Barabati palace, Barabati guest house given to various tenants under commercial lease under which monthly lease rentals along with electricity charges water charges are being received. PARA-33 The Orissa Olympic Association over the last 10 years has no source of Income other than such lease rents from letting out its various assets to large number of tenants. Substantial portion of such lease rent from exploitation of its commercial assets are claimed to be utilized for establishment expenses and other expenses like maintenance of its commercial assets comprising of Immovable property of Barabati Stadium and other allied buildings. Out of the sums realized the actual amount of expenditure claimed to have been incurred as a kind of grant to various sports association, athle....
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....ous, non-application of mind, preconceived notion and motivated one which is liable to be quashed and/or annulled. The Commissioner of Income Tax, Cuttack in par 35 of this order stated as under : "PARA-35 With such statement of affairs the crucial question arises as to whether the commercial activities of letting out certain immoveable property and moveable property to tenants on the basis of commercial lease agreements for house, plant & machinery etc. and charging fixed electricity dues and other rentals would constitute any activity being advancement of any object of general public utility or it would be in the nature of any kind of relief to the poor/education/medical relief. Obviously the organized activity of constructing and letting out buildings, room space, plant & machinery, furniture & fixtures over the last 63 years to various tenants would not in itself constitute any kind of activities relatable to relief of the poor/education/medical relief as defined under section 2(15) of the Income Tax Act, 1961. Whether the other ingredient of charitable purpose relating to the advancement of any other object of general public utility is applicable to the functioning o....
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....ch a Kalyan Mandap has been constructed for business purposes from which not less than Rs. 80,000/- per day is the rental receipts from the general public. In respect of the total expenditure of about Rs. 84 lakhs incurred by M/s. Incon Associates on construction of the Kalyan Mandap the monthly lease rent of Rs. 21,000/- has to be adjusted to the extent of 50% towards cost and 50% as monthly rent is paid to the Orissa Olympic Association. PARA-39 Such financial transactions and transfer of rights of immovable property belonging to Orissa Olympic Association appears not to have been done keeping in view of the objects of the Orissa Olympic Association. It has rather been designed to facilitate substantial financial gain to the family members of the Honorary Secretary of the Orissa Olympic Association who had acquired lease rights of over 10,000 sq.ft. of prime land in the middle of the city at a minimal lease rent of Rs. 21,000/- per month. PARA-40 It is also observed that Orissa Olympic Association had leased out its Barabati guest house having 16 rooms and Mahatab Hall to M/s. Incon Associates in which the family members of the Honorary Secretary are owners for renovation and....
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....ature with in the meaning of the section of 2(15) of the Income Tax Act, 1961." In view of the above, it is clear that the Ld. Commissioner of Income-tax has committed no by mentioning that the agreement between the appellant with the Incon Associates is very much beneficial to the appellant in view of the material brought into record from which it can be concluded that substantial financial gain has been provided to the author, founder of the trust or the persons interested within the meaning of said section. 12. The twelfth ground of appeal is that, the Ld. Commissioner of Income-tax has committed serious error by mentioning that the actual contribution of the association for the development of any sports and games to the standard of Olympic games has never been materialized in the last six decades which is highly uncalled for and for matter the rejection of application u/s 12AA of the Act is liable to be declared is a case of non-application of mind and the application for registration is to be allowed u/s 12A of the Act. The Commissioner of Income-tax, Cuttack at para-37 & 40 of his order mentioned that in the last 6 decades of operation there has been hardly any substant....
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....come Tax Authorities while examining the admissibility or otherwise of an application filed u/s 12A of the Income Tax Act, 1961 have to be guided by the CBDT Instruction 1981 issued in April, 2000 and examine the genuineness of the activities of the Association and the implication of the term charitable purpose. As per the various material facts on records the functioning of the Orissa Olympic Association are found not to be charitable in nature." The Commissioner of Income-tax, has given sufficient reason for not considering CBDT instruction after applying his mind. Therefore, the order of CIT does not suffer from any error. 14. The fourteenth ground of appeal is that, the appellant may add, delete, alter or modify any of the grounds with the leave of the Hon'ble Tribunal at the time of hearing of the matter. It is submitted that, this is a general ground and does not require any comment. Fulfilling the criteria of "Charitable purpose"is the fundamental prerequisite for the purposes of Income Tax registration and availing of the exemptions u/s 11 of the Income tax Act.1961. In the case of CIT vs. Sarvodaya llakkiya Pannai [2012] 343 ITR 300(Mad) the Hon'ble Madras High Cou....
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....f DIT(Exemption) cancelling the registration u/s 12A of the Act. In fact the facts of the assessee's case are similar to that of Tamilnadu Cricket Association except that in assessee's case registration has not been granted. Similarly, Hon'ble ITAT Panaji Bench in the case of Entertainment Society of Goa Vs. CIT in ITA No. 90/PNJ/20l2 dated 05.04.2013 reported in (2013) 23 ITR (Trib) 635(Panaji) , also upheld cancellation of registration by the CIT u/s 12AA(3). The Hon'ble Bench at Para-20 held as under: "The case of the assessee is different. The CIT issued notice to the assessee as the definition of "charitable purpose"undergoes a change by the Finance Act, 2008. We have already held that it is a case where the eligibility of the assessee to get the registration undergoes a change due to the fact that the assessee no more remains being established for charitable purpose after the amendment being made in the definition of charitable purpose given u/s 2(15) of the Income-tax Act. The assessee when applied for registration was very much a charitable institution as per the definition of the charitable purpose given u/s 2(15) at that time, therefore entitled for the registration u/s....
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....d by the CIT in his order and in this submission while discussing ground 11. For the reasons stated above, it is submitted that this is a case where the CIT Cuttack after considering the facts and circumstance of the case, has rejected the application of the assessee in view of the irregularities pointed out in the financial affairs of the association and held that the Association is not eligible for registration u/s 12AA of the Income-tax Act 1961. It is prayed to confirm the order of CIT Cuttack, in toto and dismiss the appeal of the assessee. 5. We have heard the rival submissions and carefully considered the same alongwith the order of CIT passed u/s 12A. The Assessee society was incorporated under the Societies Registration Act, 1860 and registered with Registrar under no. 344/42 of 1960-61 on 24.2.1961 as per the certificate issued by the Registrar of Societies, Mr. B. Sivaraman, copy of which is placed at pg. 1 of the paper book with the following aims and objects : "3. The objects of the Association are : a) To affiliate itself to the Indian Olympic Association and to enforce all rules and regulations of the IOA and to do everything that may be necessary or exp....
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.... of Olympic association in each district, sub-division, taluk and panchayat; l) To give financial assistance as and when possible to its affiliated members in need of such help; m) To directly manage if necessary, any game or sports from the list mentioned in article 3(c) and for which there may not be existing and affiliated association; n) To foster the spirit of sportsmanship amongst students and members of affiliated organizations; o) To frame, add, alter, maintain and enforce rules, byelaws and regulations in pursuance and subject to this memorandum of association for the control and governance of the games and sports mentioned in article 3(c) and run under the Olympic programme in Orissa and to maintain discipline. p) To take such action as may be necessary to coordinate the activities of its members and affiliated organizations in relation to this association or amongst themselves; 4. For the attainment of the aforesaid objects, the association may a) Edit, compile, print and publish any newspapers, periodicals or leaflets; b) Establish or support or add in the establishment or support of any other association having similar objects in the district, sub-divis....
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...., copies of which were also placed before us. On going through the Income and Expenditure account we noted that the main source of income of the Assessee is not only the membership fees but the Assessee has income from display of advertisement, affiliation fees, rental income, electricity and water charges, receipt from tenants, income from lease - coconuts, fish, decoration, rent of furniture. Assessee also got grant from Government of Odisha through Director of Sports, stadium advertisement, administrative charges from Orissa Cricket Association, share money from Orissa Cricket Association, royalty income and casual rental income. The Assessee has conducted several state, national and international games at Barabati stadium including cricket tournament. Orissa Hockey Association, Orissa Archery Association and other such associations have successfully organized their championship tournaments, competitions at Barabati stadium. The Assessee is thus conducting matches. It is not denied that tickets are sold or the stadium owned by the Assessee is let out. The Assessee was recognized u/s 10(23) from 1.4.1974. 5.1 The Assessee made applicatio....
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....ong with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. (c) [***] (2) where an application has been made on or after the 1st day of June, 2007 the provisions of sections 11 and 12 shall apply in relation to the income of such year in which such application is made" Procedure for registration "Section 12 AA 12AA. (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of sub-section (1)] of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) After satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) Shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing....
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....ioner] to accept a certified copy in lieu of the original; (b) where the trust or institution has been in existence during any year or years, prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up.]" 5.2 From the provision of the section 12A, it is clear that this section states that provision of Section 11 and 12 are not applicable unless condition for registration of the Trust or institution is fulfilled. Section 12 (1) (a) requires making of an application for registration; in the prescribed form and in the prescribed manner to the Commissioner before the expiry of 01 year from the date of the constitution of the Trust or institution. In case application is made after the expiry of the period of 01 year the provisions of section 11 & 12 are not applicable. For an application made prior to 1st day of June 2007, the commissioner has the power to condone the delay, if he satisfied that the person was prevented from making ....
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.... 2007-08. The Assessee was providing certain services to the general public over the last 10 years. The only activity the Assessee has broadly done is commercial exploitation of its immoveable properties in the form of Barabati stadium, shop complexes no. 1 & 2, bank building complex, ticket counters, self-constructed building, Barabati Palace, Barabati guest house given to various tenants under commercial lease under which monthly lease rental alongwith electricity and water charges are being received. Substantial portion of such lease rent from exploitation of its commercial assets are claimed to be utilized for establishment expenses and other expenses like maintenance of its commercial assets comprising of immoveable property of Barabati stadium and other allied buildings. Out of the sum realized, the actual amount of expenditure claimed to have been incurred as grant to various sports association, athletic association, amateur athletic association are found to be insignificant. CIT made comparative analysis of the last 7 years of the receipt of the business of leasing out of immoveable and moveable properties which are summarized as under : Financial Year C....
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.... a fee or service charges and therefore, the CIT was of the view that Orissa Olympic Association was involved in no activities of general public utility but clearly comprised of commercial exploitation of its property for business gain. The CIT was of the view that so far as the proviso to Sec. 2(15) is concerned, it was merely clarificatory in nature and was applicable to the earlier assessment year and therefore he took the view that the Assessee was not engaged in charitable purposes. We noted that the CIT even denied that the Assessee was engaged in advancement of any other objects of public utility. The ld. DR vehemently relied before us on the retrospective operation of the proviso to Sec. 2(15). In our opinion, the proviso under Sec. 2(15) is not retrospective. It has been added by the Finance Act, 2008 w.e.f. 1.4.2009 i.e. from A.Y 2009-10. A provision can be regarded to be clarificatory when there is an ambiguity in the interpretation of the provision. Sec. 2(15), as it stood prior to the insertion of the proviso, did not have any ambiguity. The section defines "charitable purpose" by giving an inclusive definition mentioning....
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....would have a retrospective effect. In the case of Sec. 2(15), as it existed prior to the insertion of the proviso, there was no ambiguity on the interpretation of Sec. 2(15) - what does the advancement of any object of general public utility mean? Whether it includes therein carrying on of any activity in the nature of trade, commerce or business. In fact, by putting the proviso by Finance Act, 2008 w.e.f. 2009 the legislature specified that advancement of any other general public utility shall not be a charitable purpose if it involves carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any services in relation to a trade, commerce or business for cess or fee or any other consideration irrespective of the nature of the use or application or retention of the income from such activity. From the notes and clauses of the Finance Bill, 2008 we noted that proviso was inserted in Sec. 2(15) so as to exclude from advancement of any other object of general public utility - (i) Any activity in the nature of trade, commerce or business or, (ii) Any activity of rendering any service in relation to any trade, commerce or b....
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....peak of ambiguity in the existing definition of charitable purpose as given u/s 2(15). The amendment is not by way of clarification but limits the scope of the phrase „advancement of any other objects of general public utility‟ so that the benefit may not be available to any activity in the nature of trade, commerce or business or any activity of rendering of any service in relation to trade, commerce or business for a fee, cess or any other consideration irrespective of the nature of the use or application of the income from such activity or retention of such income by the concerned entity. Therefore, in our opinion, CIT has to look into the definition of charitable purpose as on the date when the application has been made for registration by the Assessee for deciding whether the Assessee is engaged in charitable purposes or not if the Assessee is engaged in any activity in the nature of trade, commerce or business for consideration and hit by the proviso to Sec. 2(15). 5.5 Subsequently, as there has been amendment in the definition of charitable purpose, CIT is within its power to rectify its order passed u/s 12A invoking the provisions of Sec....
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....‟ equivalent to the words „carrying on trade, commerce or business‟ there would have been no need of incorporating in the proviso, the words „of any activity in the nature of‟ prior to the words „trade, commerce or business‟. The legislature is fully aware of that an institution which is incorporated for charitable purpose cannot not have profit motive. Due to this reason, if we go to the background of Sec. 2(15), the Hon'ble Supreme Court interpreted Sec. 2(15) in the case of Addl. CIT Vs. Surat Art Silk Cloth Manufacturers Association 121 ITR 1 when the Section 2(15) contained the words "not involving the carrying on of any activity for profit" after "advancement of any other object of general public utility". Profit motive in respect of an institution cannot be main object but it may be ancillary and incidental to the main objects due to which Sec. 11(4A) was also incorporated under the Income Tax Act initially by Finance Act, 1983 w.e.f. 1.4.1984. The decision of Hon'ble Supreme Court in case of ACIT Vs. Surat Art Silk Manufacturers Association 121 ITR 1 (supra) is not applicable in the case of the assess....
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.... of Indian Chambers of Commerce & Industry, 130 ITR 186 (SC). The question involved in this case was whether the income derived by a Chamber of Commerce from (a) arbitration fees levied by the chamber (b) fees collected for issuing certificates of origin and (c) share of profit in Messers, Calcutta Licenced Measures for issue of certificate of weighment and measurement, was exempt from income-tax under Section 11 read with Section 2(15) of the Act. Explaining the new qualifying words in the 1961 Act "not involving the carrying on of any activity for profit" added in Section 2(15), Krishna Iyer J. who delivered the judgement of the Court Observed as under: "The true test is to ask for answers to the following questions: (a) Is the object of the assessee one of general public utility? (b) Does the advancement of the object involve activities bringing in moneys? (c) If so, are such activities undertaken, (i) for profit, or (ii) without profit? Even if (a) and (b) are answered affirmatively, if clause (i) is answered affirmatively,"the claim for exemption collapses. The solution to the problem of an activity being one for or irrespective of profit is gathered on a footing of f....
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.... the Chamber of Commerce. The Court went on to add that in the absence of any "magna carta" binding the Chamber not to sell arbiter justice, it is not entitled to claim exemption from tax in respect of income from such activities. 5.7 An attempt was made by the Counsel for the assessee in Sole Trustee, Loka Shikshana Trust v. C.I.T, 101 ITR 234 to claim that "profit" under Section 2(15) of the Act means private profit. The Supreme Court, however, repelled the said contention on the ground that the word used in the definition given in Section 2(15) is profit and not private profit and it would not be permissible to read in the above definition the word "private" as qualifying "profit" even though such word is not there. The Supreme Court pointed out further that if it was the sole purpose of amendment in the definition as introduced in 1961, the amendment was not necessary at all for it had been declared by the Courts even before the amendment that activities motivated by private profit making fell outside the concept of charity altogether. The new word "not involving the carrying on of any activity for profit" clearly imposed a new qualification on public utilities entitled....
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....his amendment is not retrospective in operation, therefore, on that basis, CIT cannot reject the application for registration provided the Assessee complies with all other conditions. CIT, if he thinks that the Assessee is hit by the proviso to Sec. 2(15) w.e.f. 1.4.2009, can pass order u/s 154 rectifying the order granting registration to the Assessee as that will tantamount to a mistake of law apparent on record. 5.10 We noted that the provisions of Sec. 12AA(1)(a) & (b) mandates that when a charitable trust/institution makes an application for registration, the CIT at this stage is not required to examine whether the applicant trust has applied any income for charitable purpose or not. At this stage, all that the Commissioner should examine is whether the application is made in accordance with the requirement of Sec. 12A r.w.r 17A of the Income Tax Rules, 1962 and whether Form no. 10A has been properly filled up. The Commissioner may also see whether the objects of the trust are charitable or not. It is not the requirement of Sec. 12A that any activity should be carried on by the charitable trust before obtaining registration. Whether the Assessee ....
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....se, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the world. If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But this is not the sense in which the word "education"is used in clause (15) of Section 2. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling". It may be mentioned here that their Lordships of the Supreme Court in the said case applied the tests laid down by the Privy Council in re Trustees of the Tribune 7 ITR 415 where in the question invo....