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TMI Blog2008 (11) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... under :- "(i )The Trust has received a corpus fund of Rs. 25,37,000 detailed as under:- (a)Smt. Krishna Devi Rs. 7,62,000 (b)Sh. Bahadur Singh Rs. 6,00,000 (c)Mr. Mukesh Joshi Rs. 3,75,000 (d)Mr. Sardar Singh Rs. 4,00,000 (e)Sh. Jaswant Singh Rs. 4,00,000 Smt. Krishna Devi, Settlor, Mr. Sardar Singh and Sh. Jaswant Singh are not assessed to tax and the source of funds contributed by them is not verifiable except that Smt. Krishna Devi is stated to be having substantial agricultural income from the ancestral agriculture land now owned by her. (ii )The Trust has secured a bank guarantee of Rs. 37.50 lakhs to run the educational institution against the mortgage of immovable properties stated to be belonging to Smt. Krishna Devi and other family members and the investment in the properties is not verifiable. (iii)The Trust was constituted to run educational institution in Charkhi Dadri, Bhiwani whereas the same is started from Mahendragarh and the same is in violation of the provisions of Trust Deed. (iv)It has been stated that two colleges namely B. Ed. College and Art & Craft Institute have been started from a rented premises at the rate of Rs. 10,000 per month having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showing fees and other charges payable by the students for admission as discussed in earlier part of this order. It may be appreciated that there is no provision for any concession in fees or other charges from the poor students or from any other weaker starata of the society for whom the fees and other charges are highly prohibitive. I do not see any sort of charity in imparting the education to the general public. Rather, it may seen that the Trust have received Rs. 5 lakhs from Art & Craft Institute as is evident from the receipts and payments a/c for the period ended on 30-11-2004. In my opinion, the activities carried on by the Trust are with the object to earn profit and same are commercial in nature and not 'charitable' as claimed by the assessee-trust. (vii)A cursory look at clauses 20, 21, 24, 26 and 31 of the Trust Deed executed on 29-12-2003 would reveal that they do not inspire confidence to hold that the Trust is created for the benefit of general public at large. On the contrary it appears that the Trust is created for the benefit of the Managing Trustees/Trustees and is nothing more than or discretionary or private Trust. Under the circumstances the Trust cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfine himself to get satisfied about the objects of the Trust being charitable and its activities being genuine. He submitted that the so called adverse observations recorded by him in the impugned order while rejecting the application of the assessee-trust for registration under section 12A however clearly show that he has gone beyond such scope and has looked into certain aspects of the matter which were neither relevant nor permissible to go into for the purpose of grant of registration under section 12A. He then took us through each and every such observation recorded by ld. CIT(A) in his impugned order in order to demonstrate that none of them was sufficient to show that the objects of the assessee-trust were not charitable or that its activities were not genuine. He submitted that most of the said observations were based on surmises and conjectures and the same were not material or relevant to doubt or dispute the charitable nature of the objects of the assessee-trust or genuineness of its activities. 5. In this regard, the ld. counsel pointed out that separate books of account were maintained by the assessee in respect of its trust and college and overlooking this aspect, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the assessee-trust were charitable nor its activities were genuine. She submitted that the lack of sufficient infrastructure available with the assessee to run a college, the instances pointed out by the ld. CIT about the application of funds and the fact that no concession was being given by the assessee to any of the students studying in its college in terms of fees are sufficient to show that the college was not being run as a charitable activity and it was run as a commercial establishment for earning profit as any other private institutions. She contended that the onus to prove that its objects are charitable was on the assessee-trust and the vague submissions made on its behalf in this regard were not sufficient to discharge the said onus. She contended that the case of the assessee-trust thus was not a fit case to grant registration under section 12A and the ld. CIT was fully justified in rejecting its application filed for the said registration. 7. We have considered the rival submissions and also perused the relevant material on record. It is observed that section 12A prescribes conditions for registration of trust and obligates the trust or the Institution to seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the fact that the activities are genuine and are in consonance with the objects of the Trust. In other words, if establishing and running a school is the object of the Society, it has to be satisfied that the Society has established the school where education is being imparted as per rules and the factum of establishing and running the school is a genuine activity. 9. The procedure for registration laid down in section 12AA thus requires the Commissioner to satisfy himself about the genuineness of the activities and the charitable nature of objects of the Trust and as such, the scope of his powers is limited in this regard to make such enquiries as he may deem fit to satisfy himself in respect of these two aspects. As held by Delhi Bench of ITAT in case of Aggarwal Mitra Mandal Trust (supra), the application of section 13 falls within the exclusive domain of the Assessing Officer and the provisions contained therein can be invoked only by him while framing the assessment and not by the CIT while considering the application for registration under section 12AA. To the similar effect is the decision of Bangalore Bench of ITAT in the case of St. George Educational Trust (supra) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to run the educational institution was drawn by the ld. CIT on the basis of probability and this issue, in any case, was not relevant for the purpose of ascertaining the genuineness of the activities of the trust especially when there was nothing brought on record to show that no activity of running the educational institution was actually carried on by the assessee-trust in the available premises. This inference thus was drawn by the CIT mainly on the basis of doubts as clearly indicated by him in clause (iv) of his impugned order. Even the alleged failure of the assessee to furnish the necessary approval/permission from any Government authority or university for the college established by it could not have been adopted as basis by the ld. CIT to decline the registration under section 12A as the same was not the requirement for grant of such registration and this aspect was not to be looked into by him while disposing of the application of the assessee-trust for the said registration. Moreover, as submitted by the ld. counsel for the assessee at the time of hearing before us, the assessee-trust was not specifically called upon by the ld. CIT to furnish such approval or permission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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