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TMI Blog2013 (12) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Trust/Institution has to be made within a period of one year from the date of creation of the Trust, but there is no requirement that the Trust or the Institution should have started all its envisaged activities in the first year itself - The quantum of activities undertaken by the Trust after its creation, cannot be the basis for examining registration application under Section 12AA of the Act - The Tribunal observed that mere charging of high fees is also not the ground for rejection of registration - Assessee Society is entitled to get registration under Section 12AA of the Act as the Commissioner, Income-tax-I had not doubted on the objects and genuineness of the activities of the Assessee Society - Decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... Society were increased to more than rupees one crore during the financial year 2001-2002 relevant to Assessment Year 2002-2003 and in view of the provisions of Section 12 (AA) of the Act, which was inserted by the Finance (No.2) Act, 1996 w.e.f. 1.4.1997, the Assessee Society moved an application under Section 12 (AA) of the Act for registration. The said application was considered by the Commissioner Income Tax-I, Lucknow and was rejected by the order dated 30.9.2002, inter alia on the grounds that the Institution is being run on commercial lines and the activities cannot be said to be for Charitable purposes within the meaning of Section 2 (15) of the Act. Against the order dated 30.9.2002, the Assessee-respondent preferred an appeal, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Appellate Tribunal was justified in holding that scope of powers of Commissioner of Income Tax u/s 12AA is confined to examine the genuineness of the activities of the Trust or Institution and once Commissioner of Income Tax has not doubted genuineness of the activities nor doubted the objects of the Society, his power ends and he cannot be allowed to travel beyond and to enter into the scope to find out as to whether the assessee Society is a charitable institution or whether is carrying activities which are covered u/s 2 (15) of the Income Tax Act, 1961 ?; 3. Whether under the facts and the circumstances of the case, Income Tax Appellate Tribunal was justified in inferring that for the purposes of examining the genuineness of the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e objects of the trust or institution and the genuineness of its activities, he-- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant. (2) ...... (3) Where a trust or an institution has been granted registration under clause(b) of sub-section(1) or has obtained registration at any time under section 12A (as it stood before its amendment by the Finance (No.2) Act, 1996(33 of 1996)) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Therefore, the provisions of Sections 11, 12 or Section 10(23C) of the Act, deal with the income of a Trust or of the Institution and the circumstances as to when such income is to be excluded for computing the total income, but the basis of such benefit is the registration under Section 12AA of the Act. Unless a Trust or Institution is registered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re granting the registration under Section 12A of the Act. The power of the Commissioner of Income Tax under Section 12AA of the Act, does not extend to examining the other conditions of exemption of income under Sections 11 and 12 of the Act, which are to be seen in the assessment proceedings. The application for registration of the Trust/Institution has to be made within a period of one year from the date of creation of the Trust, but there is no requirement that the Trust or the Institution should have started all its envisaged activities in the first year itself. The quantum of activities undertaken by the Trust after its creation, cannot be the basis for examining registration application under Section 12AA of the Act. Furthermore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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