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TMI Blog2014 (8) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee Trust is entitled to registration under Section 12AA?" 2. The Director of Income Tax (Exemptions), Chennai appears to have been on the wrong premise in the whole case where the respondent/assessee seeks registration under Section 12AA of the Income Tax Act as a charitable institution. At the outset we would like to point out a specific line in the order, which has been totally misquoted or misconstrued by the original Authority, which reads as follows: "As per Rule 17A read with Section 17B, audited accounts of the last 3 years should have been enclosed in Form No.10B" 3. We find, Section 17B of the Income Tax Act is not applicable in the case of charitable institution and further assuming Rule 17B of the Income Tax Rules is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Form 10B, the Tribunal held that the non-filing of audited accounts does not make any difference and that does not make the trust ineligible for registration. Accordingly, the Tribunal allowed the appeal. 6. Aggrieved by the order of the Tribunal, the Revenue has preferred the present Tax Case (Appeal). 7. Heard Mr.J.Narayanaswamy, learned Standing Counsel appearing for the appellant at length and perused the materials placed before this Court. 8. We find that the issue involved in this appeal is covered by the provisions of Rule 17A of the Income Tax Rules, which reads as follows: "Application for registration of charitable or religious trusts etc. 17A. An application under clause (aa) of sub-section (1) of section 12A for registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application has been enclosed with documents as required in Form 10A. The invocation of Rule 17B (wrongly quoted as Section 17B) would apply, in a case where the charitable institution was registered under Section 12AA of the Income Tax Act. 10. Section 12A of the Income Tax Act reads as follows: 12A. Conditions for applicability of sections 11 and 12 .--(1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely : (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. (c) Inserted by Finance Act, 2001, with effect from April 1, 2002, omitted by the Finance Act, 2002. (2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) @or clause (aa) of sub-section (1) of section 12A. (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 the trust or institution, as the case may be, he shall pass an order in writing cance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st is not measured by its financial clout but by its philanthropic disposition. 13. The finding that no activity worth its name was undertaken by the assessee is untenable. This Court has already considered such plea in T.C.(A)No.579 of 2013, dated 27.1.2014 in the case of Director of Income Tax Exemptions, Chennai. V. M/s.Seervi Samaj Tambaram Trust, and held as follows: "9. In the present case also, the Revenue only questions the trust not having commenced its activity for the grant of registration. The provision under Section 12AA of the Income Tax Act does not stipulate such a condition for grant of registration. On the other hand, Section 12AA (1) contemplates satisfaction of the Commissioner about the objects of the Trust and the ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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