TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 20
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....rvations of the learned CIT[E] for refusal of registration and cancellation of the provisional registration under the facts and in the circumstances of the appellant's case. 3. The learned CIT[E] erred in refusing to grant recognition u/s 12AB of the Income-tax Act, 1961, on the ground that the appellant has neither received any donations nor conducted any activity towards attainment of the objects of the trust under the facts and in the circumstances of the appellant's case. 4. The learned CIT[E] failed to appreciate that the impugned order refusing recognition u/s. 12AB was on erroneous consideration of the provisions and therefore, the impugned order passed deserves to be vacated. 5. The learned CIT[E] is not justified in observing that the appellant had not furnished copy of the sale deed which was not specifically called for and hence, the impugned order passed is in violation of the principles of natural justice. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for ....
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....and other related expenses. The purchased building needed some modification which is being spent with the support from Budugunte Charitable Trust (PAN: AAATB3401C). 4. The assessee trust thereafter filed form 10AB on 29/07/2024 vide acknowledgment no. 188736320290724 for final registration u/s. 12AB of the Act. On receipt of the application dated 29/07/2024, the Ld.CIT(E) assigned the case to the jurisdictional assessing officer for verification. After carefully examining the submissions made by the assessee trust, the Ld.CIT(E) was of the view that the assessee trust had not furnished the details of the properties sold i.e. copy of the sale deed to establish when the property was purchased / gifted / donated to the trust to know the value of the property and therefore the value of property at Rs. 4,909/- was not considered to be genuine in absence of details. Further, the Ld. CIT(E) observed that the assessee trust has neither received any donation nor carried out any charitable activities towards object of the trust except for one single donation to another trust. Further, enquiries were conducted at the address mentioned in the ITR of the assessee in which it is seen from the s....
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....ng donation to another trust out of the sale proceeds from land cannot be said to be a commencement of the the activity of the trust and accordingly, prayed to dismiss the appeal of the assessee. 9. We have heard the rival submissions and perused the materials available on record. 10. On going through the order of the Ld.CIT(E), we find that the main contention of the Ld.CIT(E) in cancelling the registration is that the assessee trust has neither received any donation nor carried out any charitable activities towards object of the trust except for one single donation to another trust. Further, the Ld.CIT(E) observed that from the date of the inception of the trust, i.e. on 07/06/2017, the assessee trust has not filed any return of income till a.y. 2023-24 except for the a.y. 2024-25 filed on 12/08/2024. We also take a note of the fact that the assessee trust had made a corpus donation u/s. 80G(5) of the Act to Sree Vasavi Vrunda Mysore Paschima and accordingly, the form no. 10BE has been issued by the said trust on 28/05/2024 (placed at page 92 of the paper book). It is submitted that the donation was given for the educational purposes which is one of the object of the assessee t....
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....ted fact that the assessee Trust had made donation u/s. 80G of the Act to Sree Vasavi Vrunda Mysore Paschima for educational purposes. Further, as the assessee trust was not able to spend the entire sales consideration received from the sale of the land had also filed a form No. 10 on 23/07/2024 for accumulation of Rs. 1,05,00,000/- for the purpose of purchase of site and building for pursuing the activities of the trust for a period of 5 years starting from previous year 2024-25 to previous year 2028-29, which the assessee trust acquired the building in the f.y 2024-25. At this juncture, it is worthwhile here to mention the observations of the Hon'ble Apex Court in the case of Ananda Social & Educational Trust v. Commissioner of Income tax reported in (2020) 426 ITR 340 as below- "We have given our anxious consideration to the above submissions made by Ms. Aishwarya Bhati, learned Senior Counsel appearing for the appellant - Director of Income-tax and find that it is not possible to agree with the same. The purpose of section 12AA of the Act is to enable registration only of such trust or institution whose objects and activities are genuine. In other words, the Commissioner is b....
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....considered 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 object 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 the provision include "proposed activities". In the present case, although the assessee trust had filed form 10 belatedly for the accumulation of Rs. 1,05,00,000/- for the purpose of purchase of site and building for pursuing the activity of the trust as per the resolution of the trust passed on 13/09/2023 and purchased the same for Rs. 1,18,24,100/- including stamp duty and other related expenses which in our view is a proposed activity for attaining the object of the trust. 10.3 In these circumstances, we are of the considered opinion that the observation as made by Ld.CIT(E) that assessee trust had not carried out any charitable activity towards the object o....