TaxTMI 
TaxTMI 
2025 (6) TMI 814
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....stances of the case and in law the Id. Commissioner of Income Tax (Exemption) has erred in rejecting the application for registration u/s 12AB of the Income- tax Act, 1961 and also erred in cancelling the provisional registration granted u/s 12AB of the Act. 3. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Exemption) has erred in observing that: a. The appellant has not made substantial amount of expenditure towards the objects b. The appellant has not submitted any proof or evidence of activities c. the appellant has not commenced its activities towards the attainment of the objects and accordingly erred in rejecting the application- 4. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Exemption) has erred in passing order mechanically and without application of mind, for rejecting the applications filed for grant of Registration u/s 12AB of the Act without scoring out the inapplicable parts. 5. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Exemption) has erred in passing order without verifying the details submitted on record by and the an....
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....ingly held that the assessee has not commenced its activities towards the attainment of the object. The ld. CIT(E) specifically observed that in the present case, the assessee submits all the necessary documents/details as required for registration u/s 12AB of the Act. However, rejected the application in form 10AB dated 20.4.2024 filed for registration under 12AB of the Act. 4. Aggrieved by the order of ld. CIT(E), the assessee trust has filed the present appeal before this Tribunal. 5. Before us, the ld. A.R. of the assessee submitted that the ld. CIT(E) erred in observing that the assessee has not commenced its activities towards the attainment of the objects. Further, ld. A.R. of the assessee vehemently submitted that assessee had produced all the necessary documents/details as required for registration as the ld. CIT(E) herself observed in the order. Lastly, ld. A.R. submitted that it is only the genuineness of the activity and not the quantum of expenditure which are relevant for granting registration u/s 12AB of the Act. 6. Ld. D.R. on the other hand, supported the order of the ld. CIT(E). 7. We have heard the rival submissions and perused the materials available on reco....
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....(E) is that the assessee had not made substantial amount of expenditure towards the object of the Trust. We are of the considered opinion that it is not the quantum of expenditure which are relevant for the purpose of granting registration but in fact the genuineness of the activity of the trust in accordance with the object of the trust is relevant for granting registration. Therefore, we agree with the contention of the ld. A.R. of the assessee that it is only the genuineness of the activity and not the substantial amount of expenditure which are relevant for granting registration u/s 12AB of the Act. In the present case, it is an undisputed fact that the assessee had already commenced its activity towards the attainment of the object as the assessee trust had incurred the medical relief expenses towards attainment of its objects as observed by the JAO & ld. CIT(E). Since it was the first year of its operation, the assessee was not able to spend towards the large scale activity and hence, filed Form No. 10 on 30.9.2024 vide ack. No.548944470300924 for accumulation of Rs. 38,50,000/- for the purposes of "project vision and educational support" for a period of 5 years and invested ....
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....na. Apparently, a contrary view has been taken by the Kerala High Court in the case of Self Employers Service Society v. Commissioner of Income-tax - [2001] Vol.247 ITR 18. That view however does not commend itself. However, the facts in Self Employers Service Society (supra) suggest that the Commissioner of Income-tax had observed that the applicant for registration as a Trust had undertaken activities which were contrary to the objects of the Trust. In the result, we find that there is no reason to interfere with the impugned judgment of the High Court of Delhi. The appeal is, accordingly, dismissed" 7.3 We respectfully following the above judgment are of the opinion that the purpose of section 12AB of the Act is to enable the registration only of such trust or institution whose objects and activities are genuine. In other words, the ld. CIT(E) is bound to satisfy herself that the object of the trust is genuine and that its activities are in furtherance of the objects of the trust, that is equally genuine. Since Section 12AB of the Act pertains to the registration of the trust and to assess of what a trust has actually done, we are of the view that the term 'activities' in t....
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....nt relies on various judicial pronouncements by various appellate forums on this matter. 8. The Appellant submits that each of the above grounds are mutually exclusive and without prejudice to one another. 9. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of objection at any time before or at the time of hearing before the Honourable Income Tax Appellate Tribunal ('Tribunal'), so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with the law. For these and other grounds that may be urged at the time of hearing of appeal, the Appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 10. On going through the order of the ld. CIT(E), we find that the ld. CIT(E) has cancelled the approval u/s 80G of the Act mainly on the following grounds: i. The assessee trust has received the donation of Rs. 45,33,642/- from the 'Quest informatics Foundation Trust' in which the Trustee of the Assessee Trust Mr. Rudresh S Basavarajappa is also the main trustee. ii. The assessee has not made any substantial expenditure towards the object & thus has not ....
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....s; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business; (ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv) the institution or fund maintains regular accounts of its receipts and expenditure; ][*] [ The word " and" omitted by Act 32 of 1994, Section 24 (w.e.f. 1.4.1994).] (v) [the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or....