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TMI Blog2012 (10) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... ed due to above technicalities, though the earlier appeal was preferred within time. The assessee prayed that the delay in filing appeals may be condoned. The ld. DR has no objection for condonation of delay in fling the appeals. Considering the explanation of the assessee and the fact that earlier, the assessee preferred one appeal against the common order, which was withdrawn with liberty to file two separate appeals, would constitute a sufficient cause for condoning the delay in filing the appeals. Considering the facts of the case and that the ld. DR has no objection for condonation of delay, the delay in filing the appeals is condoned. 3. Briefly, the facts of the case are that the assessee trust filed an application for grant of registration u/s. 12AA and approval u/s. 80G of the IT Act on 14.03.2011. The assessee intends to set-up schools and colleges etc. with the stated objective of helping the poor and destitute, who stand in need of aid for the purpose of education. It has also been stated that the assessee would provide medical benefits to the poor, needy and aged. 3.1 During the course of hearing before the ld. Commissioner, it was mentioned that the assessee trust i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the ld. DR relied upon the impugned order and submitted that no evidence has been filed to disprove the finding of the ld. Commissioner and relied upon the decision of Kerala High Court in the case of Self Employers Service Society v. CIT [2001] 247 ITR 18 and the decision of Delhi High Court in the case of All India J.D. Educational Society v. Director General of Income-tax (Exemptions) [2011] 338 ITR 218. 6. We have considered the rival submissions and the material on record. 7. The ld. counsel for the assessee referred to the objects of the assessee trust, according to which the assessee is established for the purpose of maintaining schools, colleges and institutions for imparting education in different fields/subjects. It was, however, conceded by the ld. counsel for the assessee that the assessee has not actually carried out any charitable or educational activities for achieving the objects of the assessee trust. The ld. counsel for the assessee also conceded that the assessee is still at the stage of raising construction for schools and colleges and no educational or charitable activities have yet been started. Section 12AA of the IT Act provides - "12AA. (1) The Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of activities of the trust or institution and also to make such inquiries as he may deem necessary in this behalf and after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he shall pass an order in writing registering the trust or institution and if he is not satisfied, he would refuse registration. For grant of approval u/s. 80G(5), the assessee is required to fulfil the conditions that such institution or funds derived from any income would not be liable for inclusion in its total income u/s. 11 & 12 of the IT Act. The reading of provisions of section 12AA makes it clear that the CIT has to satisfy himself about the genuineness of the activities of the trust or institution and also in consonance with the objects of the trust or institution. Thus, on enquiry, the Ld. CIT shall have to examine as to whether the assessee who has moved application for registration is actually in the activities which are genuine. Genuineness of activities of assessee has to be seen. Both the conditions shall have to be satisfied before granting/refusing registration u/s. 12AA of the IT Act. Hon'ble Kerala High Court in the case of Self Employers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Educational Society (supra) while considering the application u/s. 10(23C) found that the accounts not maintained properly and no evidence was filed regarding activities. Therefore, rejection of application was held to be justified. 10. The ld. counsel for the assessee admitted before us that only construction activities have been going on and no actual educational or charitable activities have been carried out by the assessee. Therefore, there was no question of satisfying both the conditions of section 12AA of the Act in the case of assessee. It would, therefore, make it clear that some capital asset is created in favour of the assessee trust at the time of filing of application for registration/approval and even same is position at the stage of consideration of appeal by the Tribunal. The ld. Commissioner also found that huge amount was spent on advertisement of the institution upto passing of the impugned order, though the assessee trust is still at the stage of raising construction. Nothing was explained as to what was the purpose of spending huge amount on advertisement of the Institution, which is in the process of establishment and has yet to come in physical existence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the following decisions : (i) Order of ITAT, Rajkot (SMC) Bench, Rajkot in the case of Surajben Harakhchand Mehta v. CIT dated 11.02.2011 in IT Appeal No. 1333/Rjt/2010, in which it was held that when there are no activities at all, then there is no question of holding that the activities were not genuine. (ii) Decision of Hon'ble Allahabad High Court in the case of CIT v. Red Rose School [2007] 163 Taxman 19, in which it was stated that the assessee society was registered on 29.03.1982 and in para 41 of the judgment, it was noted that the objects of the assessee society undisputedly are for charitable purpose and not against public policy. The genuineness of its activities is proved by the aforesaid facts, which conclusively show that the society has established a school for the children in the year 1982 and thereafter it has opened its two more branches raising the standard of the school upto CBSE, Delhi Board. Therefore, the activities of the assessee could not have been doubted within the meaning of section 12AA of the IT Act. The Hon'ble High Court in para 20 held as under : "In regard to the genuineness of the activities of the trust or the institution, whose objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch it was held that for grant of registration u/s. 12AA, the CIT is required to satisfy himself about the genuineness of activities and the charitable nature of the objects of the assessee trust. The scope of his power is limited in this regard to make such enquiries as he may deem fit to satisfy himself in respect of these two aspects. The Commissioner is not required to examine the aspect of application of income. (v) Order of ITAT Delhi Bench in the case of Aggarwal Mitra Mandal Trust v. DIT (Exemption) [2007] 109 TTJ 128/106 ITD 531, in which it was held that powers u/s. 12AA are limited to make enquiries with regard to the genuineness of the activities and objects of the trust. (vi) Decision of Karnataka High Court in the case of DIT v. Garden City Educational Trust in which, admittedly the assessee trust was found imparting education. 12. None of the above decisions would support the case of the assessee. The ld. counsel for the assessee also relied upon the decision of Karnataka High Court in the case of DIT(E) v. Meenakshi Amma Endowment Trust [2011] 50 DTR 243 in which it was held that the genuineness of the activities of the trust cannot be criteria since it has yet to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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