9911796707
TMI Blog2005 (10) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for registration of trust under section 12A." Subsequently, the assessee has filed an application for admission of additional ground of appeal which reads as under : "That the orders of the learned Commissioner of Income-tax, Chandigarh are contrary to law and the facts of the appellant s case, as far as it relates to rejecting the application of the trust for exemption under section 80G." We have heard the parties and perused the records. 3. The ld. Counsel for the assessee contended before us that the CIT has passed a consolidated order in regard to registration of the trust under section 12A and exemption under section 80G of the Income-tax Act, 1961. In the appeal filed, the assessee inadvertently omitted to raise a ground relating to rejection of exemption under section 80G. It was contended that the additional ground raised by the assessee is purely legal in nature and does not require investigation of facts. Since the omission to raise the ground was inadvertent, it was contended that the additional ground of appeal may be entertained. 4. The ld. D.R., on the other hand, opposed the request of the assessee. It was contended that since the assessee had inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities for furtherance of the objects of the trust from time to time. Reliance was placed on the decisions of ITAT, Chandigarh Bench in ITA No. 158/Chd./03 and ITA No. 110/Chd./04 in support of the contention that the delay in furnishing of the application is requested to be condoned. 6. The ld. Counsel further contended that assessee had not spent funds received by way of donations as the same were for the purposes of corpus of the trust. Referring to the finding of the CIT(A) about the wrong furnishing of Form No. 15H, it was contended that the said Form was filed under a bona fide belief that income of the assessee was not liable to tax. The ld. Counsel also pointed out to the evidence placed in the paper book to support the claim of the assessee that activities were carried out by the assessee-trust from time to time for the furtherance of the objects of the trust. The ld. Counsel also pointed out that before the creation of the trust, assessee had constructed a temple in section 45 which was demolished and the matter was in the court of law. It was further contended that it was not open to the CIT to enquire into the application of the income of the assessee-trust for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to several papers in the paper book which have been introduced as additional evidence without any application for the admission of the same much less giving adequate reasons for not furnishing such evidence before the revenue authorities. It was further pointed out that the assessee had furnished wrong declaration in Form No. 15H and ultimately Shri J.S. Tanwar had filed a petition before the Settlement Commission. It was further contended that the assessee had applied for registration of the trust only after investigation and detection of FDRs by the Income-tax Department. It was further contended that the assessee had not carried on any activity in furtherance of the objects of the trust and had also not established the source of receipts/donations claimed to have been received for the corpus of the trust. Responding to the decisions cited on behalf of the assessee-trust about the condonation of delay and grant of registration in some other cases, it was pointed out that in such cases no speaking order had been passed by the CIT and no investigation had been conducted before rejection of the applications. On the other hand, in this case, the CIT has given detailed reasons on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( b )after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he ( i )shall pass an order in writing registering the trust or institution; ( ii )shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution; and a copy of such order shall be sent to the applicant; Provided that no order under sub-clause ( ii ) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause ( b ) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause ( b ) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause ( a ) of section 12A. (3) Where a trust or an institution has been granted registration under clause ( b ) of sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the CIT. ( iv )That the assessee had deposited Rs. 76,40,788 and earned huge interest on these deposits; the assessee-trust had filed Form No. 15H with the bank certifying that no tax was payable by it to avoid deduction of tax at source and, therefore, the assessee had given a false declaration. ( v )That there was no proof that the amount collected by the assessee was from voluntary contributions that too for the corpus of the trust. ( vi )That the assessee, it appears, had made application for registration as a charitable institution only when the ITO had started inquiries about the registration of the trust under section 12A after discovering the declaration filed in Form No. 15H. ( vii )That the Income-tax Department has detected huge deposits in the name of the main trustee and the latter had gone to the Settlement Commission. ( viii )That 75 per cent of the income of the trust was not utilized for charitable purposes in India. ( ix )That assessee had taxable income and the same had not been utilized for any charitable purposes. ( x )That no ingredients are made out for the assessee to be a charitable trust. 11. In our considered view, the dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. A trust with the accumulation of nearly a crore of rupees not spending a penny during the period of ten years, in our considered view, is a prominent factor that amply demonstrates that the trust is not a genuine trust. It is also noteworthy from the assessment orders placed on record by the ld. D.R. as well as by the assessee s representative that assessment have already been made in the name of the trust assessing the deposits in the status of an AOP. The Assessing Officer while framing assessment for assessment year 1995-96 has even observed that the assessee has in fact created a private family trust. In the assessment proceedings of the assessee-trust the Assessing Officer has made detailed inquiry from some of the trustees and recorded a finding that they had denied of any knowledge of the trust. Though this finding of the Assessing Officer was not available to the CIT(A) yet it supports the view taken by him about the genuineness of the trust. 13. It would be relevant to refer to the decision of Hon ble Kerala High Court in the case of Self Employers Service Society ( supra ). In this case Their Lordships held as under : "Held, that a reference to the bye-laws of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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