2018 (7) TMI 1618

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....cation for grant of registration u/s 12AA of the Income Tax Act, 1961 (hereinafter called 'the Act'). 2. Brief facts of the case are that the assessee is a religious trust and the objectives, as set out in the objective clause of the trust deed, are religious. The trust was duly registered vide Sl. No. 8383 dated 6.3.2013. The assessee constructed Maa Saraswati "Goddess of Education" Mandir at Hansi, District Hisar on land which had been taken by the assessee trust on lease vide lease deed no. 2173 dated 19.06.2013. The assessee trust applied for registration u/s 12AA of the Act, vide application in Form No. 10A, before the Ld. C.I.T. (E), Hisar on 28.10.2014. The Ld. C.I.T. (E), while examining the assessee's application, noted ....

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.... observations:- * That the overall control of the trust is in the hands of two families only and in that eventuality, the trust cannot be considered as "Public Charitable Trust". * That the two important posts of the trust i.e. President Trustee and Manager Trustee are reserved forever only for two families alternatively, as such these conditions makes the trust a private discretionary trust and not a public charitable trust. 2. That in any view of the matter and in any case, action of Ld. CIT(E) in denying the registration under section 12AA to the appellant society is bad in law and against the facts and circumstances of the case and is contrary to the principles of natural justice as the impugned order has been....

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....g Trustee and the President, the same was a private discretionary trust and not a public charitable trust. It was also submitted that since all the powers of governance and financial matters were vested with the President and the Managing Trustee who were to be appointed from two families, the same became a private trust and, therefore, the denial of registration u/s 12AA of the Act was perfectly justified. The Ld. C.I.T. DR submitted that this private discretionary trust was more in the nature of an AOP where two or more persons had joined for a common purpose. 5. We have heard the rival submissions and perused the material available on record. A perusal of the impugned order shows that the Ld. C.I.T. (E) has denied the benefit of regis....

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..... 10A within the time allowed under s. 12A of the IT Act, 1961 r/w r. 17A of the IT Rules, 1962. It is also not in dispute that the documents evidencing the creation of the trust was filed along with Form No. 10A. The learned CIT has also not doubted the objects I of the trust and also has not stated that the trust was not created for public charity and its income had not been utilised for that purpose or the property held by it was used for the benefit of the trustees or their families but the only objection of the learned CIT was that in the event of vacancy, the trustees shall co-opt another person out of the family members of that person to fill up the vacancy. That reason cannot be a valid ground for refusing registration to a trust wh....