TaxTMI 
TaxTMI 
2018 (3) TMI 219
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....any case, the order of the Ld. CIT(E), Chandigarh, is bad in law, arbitrary and devoid of natural justice and fair play. 4. That the appellant craves the leave to add, amend, modify, delete any of the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other. 3. The brief facts of the case are that Assessee Society has filed an Application in Form No. 10A on 08.6.2015 seeking registration u/s. 12A of the Income Tax Act, 1961 (hereinafter referred as the Act). The Assessee is a Trust which has been registered on 11.03.2014 in the office of Sub- Registrar, Faridabad. The main objects of the Trust have been mentioned in twenty points which are more or less general in nature. The main object of the Trust that has been mentioned is "to promote awareness of universal teaching of of SGGS (Shri Guru Granth Sahib) and other religious "Granths" among the general public and in the younger generation." Ld. CIT(E) observed that it has been claimed that the same is an educational and social welfare trust in the write up submitted during the course of hearing before him. This is in contract to the contents of the trust deed where ....
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....s. In no way the activities of the trust may be covered under any of the limbs of section 2(15) of I.T. Act. These activities also not partake the meaning of education as has been enunciated in the case of CIT vs Sole trustee Lok Shikshan Trust (1975) 101 ITR 234 (Supreme Court). Ld. CIT(E) further observed that the activities of the trust don't lend themselves to general public utility as well. The altruistic intent of the trust gets further diluted by it being open the charging subscribers for the services. In light of the above, Ld. CTI(E) was of the view that the objects of the trust don't lend themselves to the meaning of charitable purposes. As such, he declined the request to grant the registration u/s. 12AA of the I.T. Act to the applicant vide order dated 23.12.2015 passed u/s. 12AA of the I.T. Act, 1961. 4. Aggrieved with the aforesaid impugned order dated 23.12.2015 assessee is in appeal before the Tribunal. 5. During the hearing, Ld. Counsel of the assessee has stated that only issue involved in this case is relating to granting the registration u/s. 12A of the Act which has been rejected by the Ld. CIT(E), Chandigarh by observing that the contents of the trust de....
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....s alongwith address, PAN and designation; copy of notice and reply d letter -1 dated 0.12.2015 filed before the Asstt. CIT(E), Chandigarh; copy of report on activities and some online teachings of the trust submitted to the AO with rely letter -1; copy of notice and reply letter -2 dated 9.12.2015 filed before Asstt. CIT(E), Chandigarh and the copy of bank statement of the trust submitted to the AO with reply letter. 6.1 After perusing the aforesaid documents, we find that solitary issue involved in this case is relating to registration u/s. 12A of the Act which was rejected by the Ld. CIT(E), Chandigarh by observing that the contents of the trust deed claims the trust to be as only a religious trust and not the educational trust or social welfare trust as shown by the assessee in the Paper Book. We find that Trust is not only teaching through Emails/ Online where one would require internet / computer facility but also through distributing pamphlets, posters, magazines, exhibitions, write ups etc. and the working goes on as prescribed in the aims and objects of the trust and is very well explained in the activity report submitted with the Ld.CIT(E) which has not been read thorou....
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....dopting religious Granths and to do all other things which are incidental, ancillary or conductive thereto; (k) For the furtherance of the objects enumerated above, to undertake, organize and facilitate conferences, seminars, study courses, training programs, lectures and workshops and similar other activities; (l) For the furtherance of the objects enumerated above, to maintain liaison with professional institutions and educational and training bodies in various parts of the world. (m) To act in collaboration with Central and State Governments and other appropriate agencies for formulation and execution of projects which would further the objects as set out above and to accept any grants or funds and donations for the said purpose; (n) To act as a clearing house of information for various individuals, institutions or other persons interested in the activities listed above; (0) To provide consultancy services under its auspices or through its faculty to public or private institutions to further the cause of the objects enumerated above; (p) To endeavor to establish and maintain liaison with other associations or organized bodies....
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....hat in the last 3rd & 4th lines of paragraph-4 of the order dated 23-12-2015, the Ld. CIT(E) has mentioned in the absence of any expressed intent to redeploy the interest earned on charitable work, one would tend to believe that the intent otherwise is to earn interest income from donations received. However, in the trust deed's paragraph no. 10 itself mentions that the trust formed is irrevocable and paragraph no. 11 of the trust deed mentions that the funds / income of the trust shall be solely utilized for achieving the objects of the trust and no portion of it shall be entitled to for the benefits of the trustees by way of interest, bonus, dividend, profit, etc. Certified copy of the trust deed attached with the Paper Book. 6.5 We further note that in the 3rd to 5th lines of paragraph-5 of the order dated 23-12-2015, the Ld. CIT(E) has mentioned that in fact that the teachings are sought to be propagated on line convey a sense that the facilities are not open to the general public but to a select few who have internet / computer facilities. However, the Ld. CIT(E) is neither correct in this regard and has ignored the para 14 of the trust deed which specifically mentions ....
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....not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. (4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996) and subsequently it is noticed that the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then, the Principal Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution: Provided that the registration shall not be cancelled under this sub-section, ....
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....on', and not 'any other object of general public utility; Trust cannot be denied exemption by invoking the first proviso to section 2(15) where its activities in fact fall within the heads 'education', 'medical relief and 'relief of the poor' even if its objects allow it to carry on any activity for 'advancement of any other object of general public utility'. However in the instant case the appellant trust in itself is doing the activities which come under the scope and ambit of education, wherein its one of the activities is to educate the public in general about the 'word' or we may call it a 'shabad' from our religious granths. 6.9 We further note that the Hon'ble Punjab & Haryana High Court in the case of Shishu Niketan Panchkula Educational Society v. Commissioner of Income-tax, Panchkula reported in [2015] 53 taxmann.com 311 (punjab & Haryana) has held that Application for registration under section 12A cannot be rejected on ground that assessee had not yet carried on any charitable activity. However, in the instant case the assessee trust is spreading education as mentioned above and that too without charging any fixed a....