2019 (7) TMI 421

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.... registration u/s 12AA of the Act. 2. The Appellant has raised the following grounds of appeal. "1. That the order of the Ld. Asst. Commissioner of Income Tax, Circle-2, Ludhiana u/s 271AA of the Income Tax Act, imposing a penalty of Rs. 37,648/- is arbitrary, unjustified against equity and natural justice. 2. The appeal is within time. 3. The appellant craves right to add any ground of hearing at the time of hearing." 3. The Appellant has also raised the additional grounds of appeal. "1. That the Ld. CIT(E) has erred in law and on facts while rejecting the application for registration u/s 12A. 2. That on facts of the case CIT(E) is not legally justified in holding that lack of dissolution ....

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....ty and ready reference the concluding part of the order is reproduced herein below. "6. No one attended on the date fixed. However a reply dated 30.06.2017 was received on 03.07.2017 in response to the query raised through the show cause letter. At "para 9" of the reply dated 30.06.2017 the applicant self confessedly admitted that the Trust has been formed for the purpose of religious activities i.e. Adhiyatmik Sadhana, prayer and at present temple has been constructed. The applicant claimed that the activities of the trust are totally religious and charitable and the funds have been utilized for construction of Aradhana Bhawan/ Prayer center cum temple for the use of public for prayer, pravachan, bhajan kirtan and discussion of sp....

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...."charitable purpose" as envisaged in section 2(15) of the I.T. Act. Financial statements for the last three years reveal that the applicant trust has received income only through Bank interest. Donations received have been utilized for the construction of temple treating the same as corpus fund. The activities of the applicant trust do not enure to be charitable in nature and by the very name "Jain Kasur Parivar Trust" itself it appears to be a family trust pursuing religious activities of a private nature. 8. Notwithstanding the above, the papers submitted were examined. It is observed from the copy of Trust Deed that it does not include dissolution clause. The provisions of section 13(l)(c) of the IT Act states that "in ....

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....stricted group. No evidence has been adduced in favour of tire entity existing for the benefit of the general public. The application for grant of registration u/s 12AA in the present case is accordingly rejected." 6. The assessee on being aggrieved against the order of the Ld. CIT(E) filed the instant appeal. 7. Having heard the parties at length and perused the material available on record. From the concluding part as referred above of the order impugned, it reflects that the Ld. CIT(E) declined the registration mainly on the following grounds : (i) That the activities of the trust, as per clause 4(ix) and 4 (xii) of the trust deed are for the performance of regular Dhian, Sadhana, Prayers and Bhajan Sandhya and Pr....

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....e construed as a charitable activities. As there is no bar in granting a registration u/s 12AA of the Act to the Application trust for religious purposes, therefore, we are not in agreement with the observations of the impugned order as mentioned by us in para not 7(i) and 7(ii). 7.2 Now coming to the objection with regard to the name of the trust whereby the Ld. CIT(A) has held that from the very name of the trust, it appears to be family trust pursuing religious activities of a private nature. This observation is against the aims and objects of the assessee trust. In our considered view, the aims and objects cannot be determined on the basis of name of the trust, until and unless there must be some restrictions, in ensuing the aims and....