TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 694
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....IT u/s. 12(1)(ac)(vi) of IT Act, 1961. 3. The appellant craves to alter, amend any modify any ground of appeal. 4. Necessary cost be awarded to the assessee. In ITA No. 1028/JP/2024, the assessee has raised the following grounds of appeal: 1. The Ld. CIT(E) has erred on facts and in law in rejecting the application filed by the assessee in Form 10AB seeking approval under clause (iii) of first proviso to section 80G(5) IT Act, 1961 on the ground that (i) approval u/s. 80G cannot be granted without registration u/s. 12AB and (ii) assessee trust contains elements of a religious trust and thus falls out of the scope of section 80G. 2. The Ld. CIT(E) has further erred on facts and in law in cancelling the provisional approval granted by CIT under clause (iv) of first proviso to section 80G(5) of IT Act, 1961. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee." 2. The brief facts of the case are that the assessee trust applied in Form No. 10AB of the Act vide dated: 09.01.2024. After considering the replies of the assessee in response to the notices issued by t....
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....out the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i), - (A) pass an order in writing registering the trust or institution for a period of five years; or (B) if he is not so satisfied, pass an order in writing, - (I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of clause (ac) of subsection (1) of section 12A rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of sub-section (1) of section 12A, rejecting such application, after affording a reasonable opportunity of being heard. 4. The relevant provisions reproduced (supra) in bold and underlined, is an attempt by us to analyze the provision in proper perspective of Law in the light of Judicial Pronouncement of Hon'ble Apex Court, specifically the citations being relied upon by the Ld. CIT (E), Jaipur, i.e. [2012] 20 taxmann.com 46 (A.P.) Aurora Educational Society vs. CCIT, relevant paras are reproduced as under: "10. The scope and amplitude of sectio....
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....he court of Hon'ble Apex Court as under: [2022] 143 taxmann.com 276 (SC) New Noble Educational Society vs. CCIT, relevant paras are reproduced as under: "It is held that wherever registration of trust or charities is obligatory under state or local laws, the concerned trust, society, other institution etc. seeking approval under section 10(23C) should also comply with provisions of such state laws. This would enable the Commissioner or concerned authority to ascertain the genuineness of the trust, society etc. This reasoning is reinforced by the recent insertion of another proviso of section 10(23C) with effect from 1-4-2021. [Para 76]" 7. Again referring our considered opinion as discussed (supra) vide para 5, this citation relied upon by the Ld. CIT (E), Jaipur is again w.r.t. an educational institution and our findings (supra) again confirmed. It is also observed that in both the citations discussed (supra) also discussed and relied upon the judicial precedents applicable to educational institutions only. None of the precedents discussed in the case of Aurora Educational Society vs. CCIT and New Noble Educational Society vs. CCIT matches with character of th....
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....tration Act, 2012. The Tribunal held that aims and objects of assessee were of general public utility as well as to provide education and were covered by provisions of section 2(15). If the activities of assessee were charitable in nature, registration of assessee couldn't be denied merely on fact that it was not registered under Societies Act. In the light of above, objection of the Ld. CIT (E), Jaipur is dismissed and further directed that registration can't be denied on this ground. In the result relevant ground raised by the assessee is allowed. 10. Second and the last objection in this matter was about the genuineness of activities of the assessee trust. On this issue the Ld. CIT (E), Jaipur objected the registration on the ground that the assessee is not able to satisfy the Ld. CIT (E), Jaipur on following grounds as under: "The applicant showing huge amount as construction of building year to year and furnished only few bills/vouchers, while no land and building is owned. As the applicant neither such land (On which construction made) shown in Balance-Sheet nor furnished ownership of land as asked. Also in reply dated: 25.05.2024 at point no. 15, the appli....
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....Ld. CIT(E), Jaipur is required to verify the genuineness of the activities and if he has any doubt about the same, he should have carried out the physical verification/inspection to ascertain about the same. Following judicial pronouncements are also there to guide in this matter/issue: [2020] 114 taxmann.com 693 (SC) Ananda Social & Educational Trust vs. CIT "Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied in order to ensure that the object of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12. In other words, if it appears that the objects of the trust and its activities are not genuine that is to say not charitable the Commissioner is entitled to refuse and in fact, bound to refuse such registration. [Para 9] The purpose of section 12AA is to enable registration only of such trust or institution whose objects and activities are genuine. I....
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.... Tribunal is right in holding that while examining the application under section 12AA(1)(b), read with section 12A, the concerned Commissioner/Director is not required to examine question whether the trust has actually commenced and has, in fact carried on charitable activities. [Para 12] 12. Its beyond our understanding what else a newly established society/trust can furnish in response to the letter of Ld. CIT (E), Jaipur. Rather, observations on genuineness of the trust observations, made by the Ld. CIT (E), Jaipur are either wrong or self-contradictory in nature. On the one hand the Ld. CIT (E), Jaipur is claiming that no I/E accounts for the F.Y. 2023-24 furnished by the assessee, on the other hand he is commenting on various aspects, which can be fetched only from the financials of the assessee. The copy of the financials were produced before us also as discussed (supra) and the same was placed before the Ld. CIT (E), Jaipur also. On the similar facts the Hon'ble Apex Court in the case of [2020] 114 taxmann.com 191 (SC) CIT (E) vs. Rural Education and Women Welfare Society Sas Nagar held as under: "4. The Tribunal has noticed that the assets of the assessee, i.e.,....
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..... The contention that the corpus got created from such donations received for the setting up of the school, has not been rebutted based on anything to the contrary on record. And be that as it may, the fact remains that the observation in this regard in the impugned order fails to carry out the statutory mandate of satisfaction regarding the objects and genuineness of activities of the applicant. It is, therefore, superfluous and not detrimental to the applicant's claim for registration. 7. So far as regards, the observation that the fee receipts of the applicant have consistently been in excess of Rs. 2 crores, again, this objection does not pertain either to the objects or to the genuineness of the activities of the applicant. The contention that the fees received have been spent on the running of the school has not been controverted with any material on record. Moreover, to reiterate, examination of application of income can be undertaken only at the time of assessment. 8. Likewise, the Objection regarding the emphasis of the applicant allegedly being on creation of assets, rather than, on deployment of funds for education, does not render the claim for reg....
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.... are not eligible u/s. 80G(5) of the Act. First objection is no more relevant as ITA No. 1028/JP/2024, pertaining to registration u/s. 12AB of the Act (supra) has already been decided in favour of the assessee. As far as second objection is concerned, we placed our reliance on the law declared by the Hon'ble Apex Court in the case of CIT vs. Dawoodi Bohara Jamat[2014] 43 taxmann.com 243 (SC)/ [2014] 222 Taxman 228 (SC), held as under: "Under the scheme of the Act, sections 11 and 12 are substantive provisions which provide for exemptions available to a religious or charitable trust. Income derived from property held by such public trust as well as voluntary contributions received by the said trust are the subject matter of exemptions from the taxation under the Act. Sections 12A and 12AA detail the procedural requirements for making an application to claim exemption under sections 11 or 12 by the assessee and the grant or rejection of such application by the Commissioner. A conjoint reading of sections 11, 12, 12A and 12AA makes it clear that registration under sections 12A and 12AA is a condition precedent for availing benefit under sections 11and 12. Unless a....
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....nt of any other object of general public utility. A catena of decisions of this Court which have interpreted the said provision and especially the expression 'any other object of general public utility' have observed that the said expression is of the widest connotation. The word 'general' in the said expression means pertaining to a whole class. Therefore, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individuals would be a charitable purpose. The said expression would prima facie include all objects which promote the well being of the general public. It cannot be said that a purpose would cease to be charitable even when public welfare is intended to be served. [Para 30] In certain cases, the activities of the trust may contain elements of both: religious and charitable and thus, both the purposes may be over lapping. More so when the religious activity carried on by a particular section of people would be a charitable activity for or towards other members of the community and also public at large. For example, the practice of optional charity in the form....
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....ilarly, assistance by the respondent-trust to the needy and poor for religious activities would not divest the trust of its altruist character. [Para 40] Therefore, the objects of the trust exhibit the dual tenor of religious and charitable purposes and activities. Section 11 shelters such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to provisions of section 13. The activities of the trust under such objects would therefore be entitled to exemption accordingly. [Para 41] Further, one has to examine the objects under the provisions of section 13(1)(b) of the Act. It becomes amply clear from the language employed in the provisions that section 13 is in the nature of an exemption from applicability of sections 11 or 12 and the examination of its applicability would only arise at the stage of claim under sections 11 or 12. Thus, where the income of a trust is eligible for exemption under section 11, the eligibility for claiming exemption ought to be tested on the touchstone of the provisions of section 13. In the instant case, it being established that the respondent-trust is a public charitable and reli....