TaxTMI 
TaxTMI 
2019 (9) TMI 459
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....research institutions/hospitals for the health and welfare of mankind, "Hospital will be charitable only and not for commercial gains, to impart education for all classes particularly vocational education by opening schools and colleges/medical or research centers/institutes, to give grant and economic assistance for the pursuit of higher education to the needy, poor and deserving students. The society will honour the brilliant students at national and international levels who have distinguished themselves in any filed particularly education, to open branches of the society at the village, tehsil, District, Regional, State, National and International levels and to get them affiliated with the required authorities. While considering the application of the assessee society, vide questionnaire dated 01.02.2019 an opportunity of personal hearing was accorded to the assessee society with a request to provide clarifications to queries raised on 12.02.2019 as mentioned in para No.5 of the order, against which the assessee submitted the reply on dated 12.02.2019, thereafter, the application of the applicant society was rejected by the CIT(E) by holding as under: "6. In response....
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....N, Address etc. of the donor. 7 In response to the queries raised the applicant society submitted the reply. With regard to first query the applicant stated that the society was never formed to redeem CSR functions of M/s International Marketing Limited. With regard to second query the applicant stated that the society has purchased land at Chander Nagar, Ludhiana in April 2017 in the name of the society. Earlier the applicant society has not submitted the copy of the registered deed the same was submitted by the counsel of the society on 15.04.2019. With regard to fifth query the applicant society stated that the donations above Rs. 5,000/- were already submitted. But on perusal of the submissions it got revealed that the society has submitted details of donations for the F.Y. 2016-17. The applicant has not submitted any detail of donations received to the tune of Rs. 10,33,850/- during the F.Y. 2017-18 along with documentary evidences. As the main object of the society is the construction of hospital construction of which is yet to be started. In the absence of the hospital it is necessitated to examine the genuineness of the other activities claimed by the society. In t....
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.... registration u/s 12AA of the Act, with the present state of affairs, is accordingly rejected." 3. On aggrieved, the assessee society is in appeal before us against the impugned order. 4. Having heard the parties at length and perused the material available on record. The Ld. CIT(E) rejected the application of the assessee society on the grounds that the applicant has not submitted any details of donations received to the tune of Rs. 10,33,850/- during the F.Y.2017-18 along with documentary evidences. As the main object of the assessee society is construction of hospital, construction of which is yet to be started. In the absence of the hospital it is necessitated to examine the genuineness of the other activities claimed by the assessee. In this context the applicant has claimed to incur expenditure on Langer for needy people and education aid. The applicant has not provided any documentary evidences regarding expenses incurred on Langer and education aid. In the absence of documentary evidences regarding donations received and expenditure incurred on charitable activities for the F.Y.2017-18, therefore, the genuineness of the activities cannot be ascertained in this case....
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....idered opinion that the Ld. CIT(E) is empowered to put any condition while granting the registration u/s 12AA of the Act and if the Ld. CIT(E) thinks fit and proper then the Ld. CIT(E) shall be at liberty to restrict the assessee society operation in India only, but this ground for rejection of the application is unsustainable. 4.2 The Ld. CIT(E) further observed that the essential elements necessary for proper constitution of public charitable society are missing. From the MOA and aims and objects of the society and activities set out by the assessee society, it does not reflect so, as observed by the Ld. CIT(E), hence, we cannot approve this reason as well. 4.3 The Ld. CIT(E) further observed that the applicant society has merely provided a copy of MOA and bye laws which has not been approved with any competent authority. Neither erstwhile MOA has been provided, in the absence of which, the changes made by the applicant cannot be ascertained. The ld. AR submitted that erstwhile MOA is already on record, since the application under consideration is continuation of the earlier application, which was restored to the file of the Ld. CIT(E) for decision afresh by the Co-ordinate....
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....tance to needy for educational purposes and establishment of hospitals and nursing homes etc. which are covered under the dimension of Sec.2(15) of the I.T. Act. Further we feel it appropriate to reproduce herein the contents of Sec.12AA of the Act. Section 12AA (1) The Chief Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of subsection (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 to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-cl....
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....required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set up to achieve its objects of enabling educational institution, is in the process of establishing such institution and receives donations, the registration u/s 12AA cannot be refused, on the ground that the Trust has not yet commenced the charitable or religious activity" . Further, Co-ordination Bench of ITAT, Amritsar in the case of Ek Umeed Welfare Society, Fazika Vs. Assessee in ITA No.615(Asr)/2013 "Directed to grant registration to the society where the registration was denied by the CIT on ground of negligible activity till the date of registration". Let us to consider reasons for rejection of Application for grant of registration u/s 12 AA of the Act: First reason for denial of registration by the Ld. CIT was that that the assessee trust has not carried out any activity. Second reason that the assessee trust has initially decided to construct school & meditation hall at Asar Doda but later purchased land for school at Niabhat, Nagrota Third reason that the activities of assessee trust are contro....
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....ear: 2016-17 it reflects that the assessee trust has received Rs. 1,80,52,900/- as voluntarily contribution and during the Financial Year the assessee trust has incurred the expenditure of Rs. 13089100 and Rs. 379000 for the purchase of the land and its construction for School purposes, and further income and expenditure for the period ended 31st March, 2016 shows that the assessee trust has contributed Rs. 11,000/- to the P.M. relief fund and Rs. 9,472/- for cleaning moment at Katra and Rs. 5,640/- for the environment awareness and Rs. 8,548/- for medical care at FDR. On perusal of records and judgments, it is clear that at the time of registration u/s 12AA of the Act, the Ld. CIT(E) is required to see the objects of the trust or institutions and genuineness of its activities, however, if we come to the instant case, then it is not disputed that the trust was formed and registered only on 12th March, 2015 thereafter, application for registration u/s 12AA was filed on 15.05.2015 and the impugned order was passed on 30th Nov. 2015 and till the disposal of the application the assessee has only received single donation and tried to procure the land for establishment of the Sc....
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.... to satisfy himself about the genuineness of the activities of the trust or institution can call for such documents or information from the trust or institution as he thinks necessary and also empowered to make such enquiry as he may deem fit necessary in this behalf , secondly that after satisfying himself about the object of the trust or institution and the genuineness of the activities, he shall pass order in writing either register or refusing to register the trust or institutions. In the instant case no activity was carried out therefore question of genuineness did not arise. Hence, we direct the Ld. CIT(E) to grant the registration u/s 12A of the Act to the assessee and it is clarified in case, the assessee does not qualify/satisfy the objects of the trust and/or not involved in genuine activities , then the concerned authority shall be at liberty to withdraw or to cancel the registration u/s 12A of the Act. Hence, in the aforesaid observations, the appeal filed by the assessee is allowed." In view of the aforesaid observation and conclusion drawn by the Co-ordinate Bench, it is trite to say that where the assessee society is at nascent stage then it cann....