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TMI Blog2011 (7) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee - the most important point to be noted in the context is that all the properties owned by the assessee trust are held in trust for the purpose of carrying on charitable activities out of the income arising out of such properties - Registration granted - IT APPEAL NO. 796 (MDS.) OF 2011 - - - Dated:- 18-7-2011 - DR. O.K. NARAYANAN, HARI OM MARATHA, JJ. S. Sridhar for the Appellant. K.E.B. Rengarajan for the Respondent. ORDER Dr. O.K. Narayanan, Vice-President This appeal filed by the assessee is directed against the order of the Director of Income-tax (Exemptions) at Chennai dated 30.3.2011 wherein he has rejected the application put in by the assessee for availing registration under sec. 12AA of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ool with hostel facilities and running an school is nothing but a charitable activity. The learned counsel contended that the assessee is not carrying on any other activity other than running the school and hostel. Almost all the properties, except one or two, have been bequeathed in favour of the assessee trust decades ago, which were not in fact acquired by the assessee trust. As such only one or two properties were directly purchased by the assessee trust. All these properties have been acquired by the assessee not for the purpose of private enjoyment but for applying the income arising out of the said properties for the purpose of charitable activities for which the trust has been established. 6. The learned counsel further argued tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since more than 100 years and the assessee is running the school with hostel facilities attached to it. The assessee trust is having income from rent, sale of books, calendars and other hire charges. The assessee is also getting nominal amounts by way of donations and also certain sums as corpus donations. Such amounts collected by the assessee trust have been used for the purpose of running the school and the hostel and also in constructing buildings. A major portion of the outgoings of the assessee trust have been towards construction of buildings. But at the same time, there is nothing on record to show that the assessee has carried out any other activity than running the school and hostel. There is also no case that the trust income has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties fetching lesser amounts of rent may not be sufficient for the assessee trust to meet the ever increasing expenditure of carrying out its charitable activities. Therefore, it is quite natural that the assessee may explore new sources of income to support charitable activities. It is in that context that the assessee trust is constructing more buildings and acquiring assets. But the most important point to be noted in the context is that all the properties owned by the assessee trust are held in trust for the purpose of carrying on charitable activities out of the income arising out of such properties. Therefore, there is nothing unlawful in assessee acquiring assets and buildings. 10. In the first round of the proceedings, the D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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