TaxTMI 
TaxTMI 
2023 (2) TMI 1365
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....red in denying registration to the assessee trust u/s 12AA of the Income tax act, 1961 on the grounds herein below: a) That the shifting of present provision u/s 10(23C)(vi) to section 12A(a) of the Act is not permissible as per Law. b) That the corpus donation received from trustees is not for specific purpose. c) That the salaries and wages paid to the teaching staff are not as per minimum wages act. d) That the assessee trust earned huge surplus, which is not redeployed into education purpose. 4. That on the facts and circumstances of the case, the order of the Ld. CIT (Exemptions) is bad in law as CIT Exemptions is required to see the objects of the trust and genuineness of the activities and not required to examine the other extraneous considerations. 5. That the appellant craves to leave to add, amend, modify, delete any of the grounds of appeal before or at the time of hearing and all of the above grounds are without prejudice to each other." 3. Condonation of delay of two days in filing the instant appeal is requested to be condoned with the support of an application which reads as under: "With humble submission may I request your honor that I have preferred ....
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.... surpluses are consistently in the range of 35 to 40% of the receipts. In order to verify the claims of the applicant society, the following additional queries were asked vide e-mail to [email protected] on 21.09.2018 requesting them to submit the details on 23.09.2018. 6. (i) Please provide the Source of financing of fixed assets of nearly a crore in F. Y. 2015-16. (ii) Please provide details/evidence of corpus fund addition during F.Y. 2016- 17 to the tune of Rs. 20.90 lakhs. (iii) Please provide details/evidence including purpose behind sundry creditors existing in F.Y. 2015-16 to the tune of Rs. 49.79 lakhs. (iv) How did the applicant subscribe to the essential condition as existing not for profit during F.Y. 2014-15, 2015-16 & 2016-17 during which the surpluses are consistently seen in the range of 35-40% of the receipts? Please explain the same. (v) Please provide the bank statements for the last three years. (vi) Please provide the consolidated of the trust inclusive of the institutions receipt and payment account for the last three years. (vii) Please provide salary structure along with name and qualification of the teachers vis-a-vis guidelines issu....
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....table. 8. Further, on perusal of the Balance sheet as on 31.03.2017 it was observed that the applicant trust is showing Rs. 20.90 lakhs/- as corpus fund. To verify the claim, the applicant trust was asked to submit the documentary proof vide e-mail dated 21.09.2018. In response to the same the applicant submitted the list of trustees who have contributed fund towards corpus funds without any documentary evidences. Mere giving the list of persons can't confirm that it was a corpus donation. There is no evidence of any specific direction of the same being given as corpus donation. Without any specific direction & evidences for treating the fund as corpus, tire receipts of Rs. 20.90 lakhs/- should have been reflected as income in the Income & Expenditure Account and don't fall under the ambit of section ll(l)(d) i.e. "income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution". 9. Further, the applicant trust was asked to provide salary structure along with name and qualification of the teachers vis-a-vis guidelines issued by school education department J&K. The applicant trust stated tha....
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....ng F.Y. 2014-15,2015-16 & 2016-17 respectively as shown in table above. The fact of the case also reveals that the surpluses have not been redeployed into education. 11. In view of above discussions, it is clear that the applicant trusts intent is to generate excessive surpluses much beyond what has been held as reasonable. Also, without any specific direction & evidences for treating the fund as corpus, the receipts of Rs. 20.90 lakhs/- was treated as corpus by the applicant trust. The same should have been reflected as income in the Income & Expenditure Account in the absence of it assuming the character of corpus funds. Non- furshing of bank statements for three years' despite being specifically asked for further hinders examination of the applicant's claims about its finances. In view of all of the above, no satisfaction about the genuineness of activities can be recorded in the case. The application for registration u/s 12AA of the Act is accordingly rejected." 5. The Ld. Counsel for the appellant submitted that on the facts and circumstances of the case, the order of the Ld. CIT (Exemptions) is bad in law as CIT Exemptions is required to see the objects of the trust and ge....
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....Appeal No.5437-5438/ 2012 vide order dated 19.02.2020 has laid down the basic principles for allowability of basic registration. 2. While passing the order for rejecting the application for grant of registration filed by the assessee trust, the Ld. CIT(E), Chandigarh had pointed out:- (i) The Ld. CIT(E) observation on that since the assessee was availing exemption u/s 10(23C)(iiiad) of the Act should have applied registration u/s 10(23C)(vi) of the Act. The observation of the Ld. CIT is not as per law as the assessee was availing exemption u/s 10(23C)(iiiad) because the receipts of the Trust are less than one crore. The assessee trust forecast that the receipts of the trust will cross one crore and accordingly applied for registration u/s 12AA of the Act. There is no bar in the provisions of the Act which debars the institution to apply for registration u/s 12AA of the Act, if already availing the claim u/s 10(23C)(iiiad) of the income tax Act, 1961. (ii) The Ld. CIT(E) observation that the corpus donation received from Trustees are not for specific purpose The corpus donation of Rs. 20,90,000/- received from the Trustees of the Trust have been specifically utilized for t....
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....E) has to satisfy while granting the registration u/s 12AA of the Act that the objects of the assessee Trust are charitable in nature and the activities are genuine. The objects of the Trust are educational and are covered under the definition of section 2(15) of the Income tax Act, 1961. The Hon'ble Supreme Court in the case of M/s Anand Social and Educational Trust v/s CIT in Civil appeal No.5437-5438/2012 vide order dated 19/02/2020 has laid down the basic principles for allowability of registration. Since the assessee Trust has fulfilled all the requisite conditions as laid down under the said provisions of the Act, it is prayed that the Ld. CIT(E) may kindly be directed to allow registration under Section 12AA of the Income tax Act, 1961 to the assessee trust. Further, the Hon'ble Delhi Bench 'G' Delhi in the case of Sanatan Dharam Sabha Durga Bhavan Hissar Road, Rohtak v/s CIT(E) Chandigarh ITA No.2468 & 2469/2017 held that we may observe at the stage of grant of registration u/s 12AA of the Act what is required to be seen, whether activities of the Trust or institution are genuine and secondly, objects are of charitable in nature. At the stage of granting r....