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TMI Blog2013 (6) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... is possible for the members of the trust, upon its dissolution, to divide the remaining funds among trustees. In view of the foregoing, it is considered appropriate to set aside the order passed by the Ld Commissioner of Income-tax and restore the matter to his file so that reasonable time is made available to the assessee-trust to amend the trust deed and also enable the Commissioner of Income-tax to take a reasonable view in the matter in conformity with law. The assessee-trust can amend the trust deed within a period of three months from the date of receipt of this order failing which the Commissioner shall be free to pass such order as he considers appropriate in the matter. - ITA No. 172/Rjt/2013 - - - Dated:- 20-6-2013 - D.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e called upon the assessee-trust to furnish trust deed, certificate u/s 13(1)(c) signed by all the trustees, proof of activity carried out, acknowledgement of return of income filed by the trust and certificate issued under BPT Act, 1950. The attention of the assessee was also invited to the fact that there was no provision in the trust deed to ensure that the properties of the trust upon dissolution will be transferred to another trust having similar object. In reply, the assessee-trust submitted an undated letter before the Commissioner of Income-tax. After considering the aforesaid submissions made by the assessee, the Ld Commissioner declined to register the assessee-trust with the following observations:- 4. The reply of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trust are to carry out various educational and social activities for the sake of poor and needy people. However, on verification of your application suggests that no activities towards the objects have been carried out since the inception of the Trust. Further, the Trust Deed don't contain provision regarding dissolution of the Trust to the effect that on the dissolution, the properties of the Trust if any, after meeting the liabilities of the Trust would be transferred to another Trust having the same objects. 4. The Applicant Trust has submitted reply to Show Cause Notice on 18th Feb. 2013 that. 1. The trust is duly registered under the Bombay Public Trust Act, 1950. Hence the all the Provisions of the Bombay Public Trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that on dissolution, the properties of the trust if any after meeting the liabilities of the trust would be transferred to another trust having same objects. Such ground for non granting registration u/s 12A(a) of the Act, 1961 is mere presumption and on surmise that the properties at the time dissolution shall be disposed off by the trustee and not transferred to another trust having same object. 7. The Learned CIT-Jamnagar has rejected an application for registration u/s 12A of the IT Act, 1961 by stating that The reply of the assessee trust has been considered at length and is found to be unacceptable. Since the assessee trust did not comply with the requirements of the show cause notice dated 05.02.2013 and as the trust deed does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act; and (ii) Trusts for Charitable or Religious Purposes, the income of which is exempt u/s 11 upon fulfilment of requisite conditions. There is another way to look at two types of trusts envisaged by the Income-tax Act and that is (1) a private trust covered by Chapter V of the Income-tax Act; and (2) a trust for charitable or religious purposes contemplated by Section 2 (15) of the Income-tax Act r.w.s. 11 to 13B of the Income-tax Act. 8. The income of a trust or institution established for charitable purpose as defined in Section 2 (15) of the Income-tax Act is exempt from levy of income-tax on fulfilment of the conditions laid down under section 11 to 13B of the Income-tax Act. One of the mandatory conditions for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity must be present in all the activities enumerated in section 2(15). Perusal of the trust deed filed by the assessee-trust before us does not show that the activities proposed to be carried out by the assessee-trust are in the nature of charitable activities. It is true that clause 3 of the trust deed, which lays down the aims and purpose of the trust, authorizes the assessee-trust to establish and run school and colleges, provide medical relief to poor etc., but there is no stipulation in the entire trust deed that the aforesaid activities would be carried out by the assessee-trust as charitable activities. 11. There is no clause in the trust deed to show that the assessee-trust has been created as irrevocable trust. As already ment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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