TaxTMI 
TaxTMI 
2026 (2) TMI 1413
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.... hostels. b) To provide fees, books, equipments, freeships, and/or scholarship to deserving students. c) To help and assist poor and deserving people in marriage. d) To conduct seminars/workshops and arrange special tuition/training for students. e) To provide/assist in setting up laboratories. f) To make donations to other public charitable Trusts/institutions providing relief to poor, animals and engaged in social activities. g) To set up and operate schools/colleges. h) To conduct nutritional and health services. i) To conduct/operate programs for providing nutritional assistance e.g. to operate a school/lunch/food programs for children, operate nutritional supplement programs for needy women which shall be provided/conducted/distributed free of charge. j) Testing of diets from nutritional view point. k) To render assistance to poor patients by providing medicines etc. provisions of health care, preventive medical services (including dental services). l) Assistance to hospitals in setting up the various facilities such as Blood Bank, Eye Bank, Burn Centers, etc, for the poor patien....
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....me of the trusts to which donations are made were not even registered trusts like Shantivan Gopal Gaushala or Shri Krishan Gopal Gaushala. 5. As from the information submitted by the assessee competent authority observed as follows: "3.3 Further, it is observed from the ledger a/c submitted by the trust that: i) The Trust received donation from Shiv Shakti Inter Globe Exports amounting Rs. 5,00,000/- on 04.02.2020 and same day the amount was donated to Shree hanuman Sewa Samiti Taraori. ii) Loan of Rs. 5,00,000/- was given to Shanti Van GopalGaushalla on 24.04.2020. iii) Loan of Rs. 7,00,000/- received on 17.06.2020 from Sh. Ramesh Chand Gupta (chairman of the trust), but as per ledger account the trust did not have any usefulness of loan as the bank balance of trust was Rs. 18,97,931/- and also the trust had not used the Loan after receiving. The loan was returned back on 20.11.2020. iv) The assessee trust has submitted voucher of purchase of rice from Shiv Shakti Interglobe Exports Pvt. Ltd, which is a related company as Sh. Ramesh Chand Gupta Chairman of the Trust is a Director in the said company. v) Thereafter, a loan of....
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....ng its nature of transactions with Shiv Shakti Inter Globe Exports Pvt. Ltd. The reply of the assessee is reproduced as under: "2. That the assessee trust is established solely for providing the relief to the poor and is providing free food by way of distribution of food to the needy and poor people without any distinction of caste, colour and creed. The trust is also helping other NGO by organizing free food to the people at large by way of bhandara etc. The details of contribution made by the trust to the other NGO's has already been submitted to your goodself vide Annexure 7 of our reply dated 20.11.2024. 3. That the assessee has purchased rice from M/s Shiv Shakti Interglobe Exports Private Limited on cost to cost basis as one of the trustee is director in the said company. The trust has purchased this rice for free distribution amongst the needy people. The market price of the rice were higher and for the noble cause of charity, the rice was purchased from Shiv Shakti Interglobe Exports Private Limited on cost basis. That regarding loan taken from Shiv Shakti Interglobe Exports Pvt limited by the trust, it is submitted that the trust has requested the com....
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....Act is rejected of as the applicant has failed to provide any details or proofs of its activities. In the absence of the same, it is difficult to ascertain the genuineness of the activities being carried out by the applicant. Accordingly, the application filed by the applicant for registration u/s 12A(1)(ac)(iii) of the Act is hereby rejected, which also supersede any registration granted u/s 12AB of the Act by any authority at any earlier time. 6. On hearing both sides we further find that primarily the competent authority has doubted the activities on the basis of manner of use of funds but the moot question is whether at the stage of considering application for registration u/s 12A the scope of inquiry requires or provides powers to examine the financial aspects of the applicant. In this regard we are of the considered view that certainly to the extent that the financial aspect of the applicant relate to the understanding of genuineness of the activities the competent authority can certainly examine the issue but otherwise it is the genuineness of activities as a whole as reflected from the documents incorporating the applicant institution seeking the registration u/s 12A whi....
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....ust. There is no allegation that some benefit has been taken by the Chairman of the Trust instead he has helped the trust. 10. In regard to assessee trust purchasing of rice from Shiv Shakti Interglobe Exports Pvt. Ltd, which is a related company as Sh. Ramesh Chand Gupta Chairman of the Trust is a Director in the said company. We are of the considered view that purchase of rice from Shiv Shakti Inter Globe Exports Pvt. Ltd. which is related to the Chairman is too not some prohibited activity under law more so when same is not doubted for inadequacy. There is no allegation that purchase price for the rice was above the market price or some undue advantage has been taken. 11. Coming to examination of transaction of loan of Rs. 5,00,000/- was received back from Shanti Van Gopal Gaushalla on 04.07.2020 and the balance of the trust was 30,97,931/- and out of the balance a loan amounting Rs. 30,00,000/- given to Shiv Shakti Inter Globe Exports Pvt. Ltd., a related company of the assessee trust on 07.07.2020. The related company returned back the loan on 19.08.2020 with no interest. We are of the considered view that any benefit is given to the Shiv Shakti Inter Globe Exports Pvt. ....