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TMI Blog2013 (2) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts for such a short period, formed its opinion that the activities of trust are not charitable in nature. The CIT has not raised any objection on the objects of the trust. In our considered opinion, it was premature for CIT to judge the activities of the Trust by just glancing through the statement of accounts of the trust of such a short period. Therefore, set aside the order of the CIT and direct the CIT to grant registration to the assessee trust under section 12AA. Consequent to the registration under section 12AA also direct the CIT to consider the application of the assessee for grant of initial certificate of exemption under section 80G(5) - in favour of assessee. - IT Appeal Nos. 1911 & 1933 (Mds.) of 2012 - - - Dated:- 18-1-2013 - N.S. Saini And Vikas Awasthy, JJ. G. Baskar for the Appellant. Anirudh Rai for the Respondent. ORDER Vikas Awasthy, Judicial Member - The present set of appeals i.e. ITA No.1911 1933/Mds/2012 have been filed by the assessee impugning the order of the Commissioner of Income Tax, Salem passed under section 12AA and 80G(5) (vi) of the Income Tax Act, 1961 respectively both dated 14.9.2012. 2. Brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2010]. The learned AR has also referred to the judgement of Hon'ble Madras High Court in Tax Case Appeal No.337 338/2011 decided on 13.12.2011 in the case titled DIT (Exemptions) v. JITO Chennai Chapterr [2012] wherein the Hon'ble High Court has observed as under:- 4. A reference to Section 12AA of the Act would show that at the initial stage, there is an obligation on the part of the authority to find out and give his opinion about the genuineness of the activity of the society/trust. Inasmuch as the order of the Director of Income Tax (Exemptions) has not spoken anything about the genuineness of the Society, the rejection of the application, in our view, is not in accordance with law. The A.R. further pointed out that while rejecting the application for registration under section 12AA, the CIT has observed that the trust is not precluded from filing another application subsequently after obtaining necessary approval from the State Govt. authorities concerned along with statement of accounts showing earning of income and application for charitable purposes in accordance with the trust deed and satisfying other statutory requirements. The A.R. submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toric interest,] and the advancement of any other object of general public utility: 6. The Board Circular No.11 of 2008 dated 19.12.2008 relates to exemption under section 11 in case of assessee claiming both to be charitable institution as well as mutual organization. The relevant extract of the circular is reproduced herein below:- CIRCULAR NO. 11/2008, DATED 19-12-2008 Definition of 'Charitable purpose' under section 2(15) of the Income-tax Act, 1961 Section 2(15) of the Income Tax Act, 1961 ('Act') defines charitable purpose to include the following:- (i) Relief of the poor (ii) Education (iii) Medical relief, and (iv) the advancement of any other object of general public utility. An entity with a charitable object of the above nature was eligible for exemption from tax under section 11 or alternatively under section 10(23C) of the Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of 'charitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Centre (supra) has held as under:- 10. Facially, the above provision would suggest that there are no restrictions of the kind which the Revenue is reading into in this case. In other words, the statute does not prohibit or enjoin the CIT from registering trust solely based on its objects, without any activity, in the case of a newly registered trust. The statute does not prescribe a waiting period, for a trust to. qualify itself for registration. 11. If the Revenue's contentions are correct then, necessarily, a condition would have to be read into the provision that the CIT should be satisfied that the trust is in fact engaged in charitable activities which would in turn inject considerable deal of subjectivity. It is quite possible that if such flexibility is introduced, it would be susceptible to varied interpretation by the different authorities, in that some would be satisfied with activity of few months, while others may wish to examine the activities of the organization for longer time. In this view of the matter, this Court is persuaded to follow the interpretation given to s. 12AA by the Karnataka High Court, in Director of IT (Exemptions) v. Meenakshi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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