TaxTMI 
TaxTMI 
2018 (2) TMI 874
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....21 days for which the application for condonation of delay is filed for the reasons stated which is supported by the affidavit. The reasons given by the assessee for not filing the appeal in time appears to be genuine. Therefore, the delay of 21 days for filing appeal is condoned. 3. The grounds of appeal are as under:- ITA No. 6527/Del/2016 1. "That the order of Commissioner of Income Tax (Exemptions), Chandigarh is against law and facts. 2. That on the facts and circumstances of the case of the Appellant, the order of the Commissioner of Income Tax (Exemptions) is not justified in denying registration of the trust u/s 12AA of the Act stating that the trust is formed merely for complying the CSR requirements of the settler company ....
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....before the CIT (exemption) Chandigarh, as on 28/03/2016. An order rejecting the application for grant of registration under Section 12AA was passed on 27/09/2016. The registration under Section 12AA was rejected on the ground that the assessee trust has been formed by the settler M/s Veer Overseas Ltd. for the purpose of carrying out its CSR activities. The Commissioner of Income Tax (Exemptions) rejected the application for registration u/s 12AA on the ground that Para 10 of this application are held as under:- "10. Considering all of the above it is safe to conclude (i) that the main aim appears to be forming a trust merely for complying to C.S.R requirements (ii) that the trust has been stated to be formed to implement the CSR activiti....
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....ed about the genuineness of the activities of the assessee nor doubted its charitable object, his/her powers under Section 12AA does not empower to reject the registration of the assessee trust. The Ld. AR also relied upon the following case laws on this issue: i. Shri Sain Ji Dharmarth Trust Versus Commissioner of Income- tax [2006] 8 SOT 446 (DELHI) ii. Commissioner of Income-tax-ll, Chandigarh Versus Surya Educational & Charitable Trust [2013] 355 ITR 280 (P& H -HC) iii. St. Don Bosco Educational Society v. CIT [2004] 90 ITD 477 (Luck.); iv Baba Gandha Singh Education Trust vs. CIT', (2011) 138 TTJ (Chd) (UO) 1; v. Reliable Educational Alliance Society v. CIT' [2009] 126 TTJ 407 (Delhi); and vi Dream Land Educational Tr....
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....eard both the parties and perused the material available on record. It is pertinent to note that the reasons (i) and (ii) given by the CIT (exemption) is that the main aim appears to be forming a trust merely for complying to CSR requirements. When a trust is created for the purpose of carrying out CSR activities, the registration under section 12AA of the Income Tax Act, 1961 cannot be denied. Vide notifications dated 27/02/2014 the ministry of Corporate affairs in the rules framed for the purpose of CSR has implicitly provided for forming the dedicated trust under sub rule 2 to rule 4. It has been stated as under: "(2) The board of a company may decide to undertake it is CSR activities provide by the CSR committee, through the registere....
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....irect beneficiary by the transferring its funds to other society. Even the funds given to another charitable society for the purpose of charity are considered as application of income for the purpose of exemption under Section 11 of the Income Tax Act, 1961. At the time of granting the registration under Section 12AA of the Income Tax Act, 1961, the CIT (exemption) need not go beyond two parameters that the object being charitable in nature and activities being genuine. All other activities are the matters to be taken care of by the Assessing Officer at the time of assessment for granted exemption under section 11 of the Act. Reasons (vi) given by the CIT (exemption) that it also militates against the legal principal that social enterprises....