TaxTMI 
TaxTMI 
2024 (10) TMI 414
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....1 (here in after "Act"). 2. In this appeal, the assessee has raised following grounds: - "1. That the learned CIT(Exemptions) was not justified on facts and in law in cancelling the registration of the assessee trust as granted by CIT, Jodhpur, under sec. 12A(a) of the Income-tax Act, 1961. 2. That the registration of the trust was cancelled all of sudden after more than 28 year without any basis and justification. The same is not justified both on facts and in law.' 3. That the learned CIT(Exemptions) has not provided the copies of the Field Officer Report and other documents relying on which he cancelled the registration. The same is not justified both on facts and in law. 4. That the learned CIT(Exe....
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.... 1.3 The learned CIT (Exemption) in para 12 stated as under: "12. Section 12AA(3) empowers the Commissioner to withdraw the registration granted u/s 12AA if he is satisfied that the: (a) activities of the trust or institution are not genuine. (b) are not being carried out in accordance with the objects of the trust or Institution." 1.4 The learned CIT (Exemption) was of the view that the activities of the assessee trust are not being carried out as per the objects of the Trust. He finally concluded in para 15.7 that: "15.7 In absence of any evidences submitted by the applicant, it cannot be held that the hospital activities are being run by the applicant. The field officer report, discussed in th....
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....ital is non- functional. The trustees are staying in trust property without paying any rent. This is clear cut violation of Section 13(1)(c) which mention that if the property of trust is used the trust will not be entitled for benefit u/s 11 & 12." 1.7 The learned CIT (Exemption) concluded in para 17 that. "17. Based on above discussions it can be concluded that the activities of the trust are not as per the objects of the trust and, therefore, are not genuine and also the property and income of the trust has been used for the personal benefit of the trustees, therefore, the provisions of Section 12AA(3) & 12AA(4) are attracted. In view of these provisions, registration granted vide Niya/J-3/12(A)87-88/1045, dated 13.01.1....
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....R further submitted that the provisions of ss. 12AA(3) and 12AA(4) are not applicable to the facts of the case and the order of the ld, CIT(E) cancelling the registration of the assessee trust is not correct both on facts and in law which should be quashed. 1.14 The assessee therefore very humbly prays that the order of the CIT (Exemption) cancelling the registration of the assessee trust may please be quested." Concerning the above issue, the ld. AR of the assessee has filed the following documents to dispel the doubt raised in the mind of the ld. CIT(E). S.No. particulars Paper book page No. 1. Appellant's submission to the Hon'ble members, ITAT, Jodhpur bench, Jodhpur. S-1 S-6 Enclosure....
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....g salary against such service and in spite of this they are bearing electricity, water bills and maintenance charges of the trust building and in order to meet the requirement of capital expenditure such persons also provided interest free deposit which does not show that there is misuse of the trust property. These comments of the ld. CIT(E) did not doubt the activities of the trust, the receipt of income from rent is as per object of the trust and the benefit that the trustees are getting cannot be a sole reason to reject the registration of the trust. Thus, on both the issues we get strength from the judgment of the apex court in the case of Ananda Social and Education Trust (Supra) where the court held that : "Section 12AA undo....
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....that the object of the Trust are genuine and that its activities are in furtherance of the objects of the Trust, that is equally genuine. Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust u....