9911796707
TMI Blog2004 (2) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... ground for refusing registration to a trust which is created having the main object of charitable purpose. In view of clear provisions of law referred, we are of the considered view that registration u/s 12A of the Income-tax Act, 1961 cannot be refused to trust on the basis that there is a clause in the Trust Deed that in the event of a vacancy in the Board of Trustees, another family member of the trustee can be co-opted from the very family of the outgoing trustee. While taking such a view, we are fortified by the judgment of Hon'ble Allahabad High Court in the case of Fifth Generation Education Society[ 1990 (5) TMI 38 - ALLAHABAD HIGH COURT] , wherein it has been held that the CIT was required to see as to whether the objects of the trust were charitable or not. He was further required to see as to whether the application was made in accordance with the requirements of section 12A of the Income-tax Act, 1961 read with rule 17 of the Income-tax Rules, 1962. Furthermore, it has been held in the said case that the CIT was not required to examine the application of income. Thus, we are of the view that the ld. CIT was not justified in refusing registration to the assessee mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection, we have to state that for constituting public trust one of the conditions is that the beneficiary thereof should be general public and that the object should not be such as resulting in private gains. If your honour go through the clause 13 of the trust deed and both the proviso of clauses 1 to 13 of the trust deed at page 3, your honour will find that objects of the trust are such as to be carried out for the public at large and charitable purpose and the trust property and its income shall be spent and utilized for the charitable purpose of the trust. It was further provided that no part of the trust property or income thereof shall in any circumstances whatever be paid or lent etc. or applied for the benefit of the settler or trustees. The trust shall be irrevocable. In such circumstances, it is not correct to say that trust itself is family affair or settlement than a public charitable trust. The objects of the trust and the genuineness of its activities are carried out for the public at large and its income has been spent and utilized for the charitable purpose of the trust. No income of the trust is applied for personal benefit of the trustees. Simply the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch purposes:- 1. To establish, maintain and/or grant aid in cash and/or in kind to hospitals, sanitorium, charitable, medical schools, medical college, nursing institute, and/or mobile dispensaries, after care clinics, maternity homes, nature cure clinics, child/welfare centre and/or such other similar charitable institutions for the benefit and use of the students and/or for the benefit and use of public in general. 2. To establish, support, maintain, acquire, run and/or grant aid and assistance to schools and college hostels, boarding like nature for use of the students and the staff, to distribute books and literature on ethical, cultural, social and national subjects and also generally for the development and/or advancement of education and diffusion of knowledge amongst the public in general. 3. To establish, maintain and/or run studentship, scholarships, and other kind of aid to poor students including supply of books, stipends, meals and other incentive to the study and to provide boarding and residence for poor students in general. 4. To grant aid, to promote establishment, support and/or maintain institution for the promotion of science, literature and fine arts, diffusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at person to fill up the vacancy . Only on that basis, the Id. Commissioner of Income-tax considered that the trust was a family affair/settlement. However, he has not brought any material on record that by co-opting a person from the family of the previous trustee, how the object of the trust has been changed or by co-opting another family member of the trustee on account of vacancy as to how the income was not utilized for the public charity. In the context of the present case, it is necessary to discuss the conditions as to registration of trusts, which have been prescribed in section 12A of the Income-tax Act, 1961, which states as under:- 12A. The provisions of sections 11 and 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely,- (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Chief Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up. It is also noticed that Form No. 10A has been prescribed for filing the application for registration. Thus, on a combined reading of the above provisions, it would be clear that the application for registration under section 12A of the Income-tax Act, 1961 has to be made in Form No. 10A prescribed by rule 17A of the Income-tax Rules, 1962, before the expiry of one year from the date of the creation of the trust or establishment of the institution whichever is later. It has to be made by the person who is in receipt of the income of the trust. After receiving the application, ld. Commissioner of Income-tax is required to examine whether the application is made in accordance with the requirements of section 12A of the Income-tax Act, 1961 read with rule 17A of the Income-tax Rules, 1962, and whether Form No. 10A has been properly filled up. He is further required to see as to whether the objects of the trust are charitable or not. 8. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
