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TMI Blog2013 (1) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... estions of law:- "i) Whether the Hon'ble ITAT is justified in law in holding that the CIT erred in refusing to register the assessee u/s 12A of the Income Tax Act. ii) Whether the Hon'ble ITAT is justified in directing to grant registration when the Trust is an autocratic/private discretionary/family Trust as there is no provision for independent internal check on the discretionary functioning of the Trust as the control over the affairs of the Trust is in the hands of six Board of trustees, three of which belongs to Katyal family, who hold the key positions in the Trust? iii) Whether the Hon'ble ITAT is justified in directing to grant registration when the Trust has made huge investment in the form of FDR with banks with a view to earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that main motive of the Trust was to earn interest income. Reliance was also placed upon the judgment of Kerala High Court in Self Employee Service Society Vs. CIT (2001) 247 ITR 18. It was accordingly held that no activity had been carried out in relation to the aims and objects of the Trust during the financial year 2008- 09. The terms and conditions enshrined in the Trust deed whereby the trustees had the power to convert the Trust property , acquire immovable property, sell, charge, rent out or otherwise alienate the assets including immovable property for personal/non-charitable purposes. The trustees had autocratic and discretionary powers to remove without any notice/reason a trustee except founder trustees and there was a provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector of Income-tax Vs. Garden City Educational Trust (2011) 330 ITR 480 (Karn.) was referred to in support. 5. Counsel for the revenue has contended that the Trust had not carried out charitable activities and, therefore, it was not entitled for the benefit of registration. 6. A perusal of the facts depicts that the Trust was created on 23.6.2010 and application under Section 12A(1) (aa) of the Act was moved on 19.7.2010 and the same was rejected on 26.11.2010. This Court in ITA No.710 of 2010-Commissioner of Income Tax-II, Chandigarh Vs. M/s Surya Educational & Charitable Trust, decided on 5.10.2011 has held that the application for registration is required to be made within one year of the creation of the Trust and there is no require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar of the person in receipt of the income derived from the property held under the Trust wholly for charitable or religious purposes, whereas Section 12 of the Act, deals with the contributions received by the Trust or an Institution, established for charitable and religious purposes, receiving contribution, shall not be an income in terms of Section 11 of the Act. The benefit of Sections 11 and 12 of the Act, are available only if such Trust or Institution is registered under Section 12AA of the Act. On the other hand, Section 10(23C) of the Act are the provisions of the Act in substitution of the earlier provisions of Section 10(22) of the Act as to which income shall not be included in computing the total income of any person. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r application of income is yet to arrive i.e. when such Trust or Institution files its return. Therefore, we find that the judgments referred to by the learned counsel for the appellant are not applicable to the facts of the present case arising out of the question of registration of the Trust and not of assessment. In view of the above, we do not find that any substantial question of law arises for consideration in the present appeals. Hence, the same are dismissed." 7. The said view has been followed by this Court in ITA No.881 of 2010 The Commissioner of Income-tax, Bathinda Vs. M/s Baba Deep Singh Educational Society, SCF 23, Bharat Nagar, Bathinda decided on 13.10.2011 wherein it was held as under:- "In view of above facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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