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TMI Blog2016 (6) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... for registration, which was found to be in order and where the objects of the trust are charitable and activities of the trust are genuine, for the reason that surplus has been generated by the said trust does not merit its rejection. Further, we find no merit in the order of Commissioner in denying registration under section 12AA of the Act on the ground that there was delay in filing of initial application for registration under section 12A of the Act. The perusal of objects of the trust, clearly establish that the trust was established for carrying on charitable activities and as per clauses 5 and 6 of the Trust Deed, it was provided that the income of the trust fund or any part or parts of the trust fund or residue of the income would be applied for the benefit of all the persons irrespective of caste, creed, nationality or religion. Even if the said activity takes the colour of religious activity, the registration under section 12AA of the Act cannot be denied, where the assessee is engaged in both charitable and religious activities - Decided in favour of assessee. - ITA No.1482/PN/2014 - - - Dated:- 27-4-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was that the assessee had surplus in assessment years 2011-12 and 2012-13, as per the returns of income filed by the assessee itself, on which no taxes were paid after erroneously claiming exemption under section 11 of the Act, without first obtaining registration under section 12AA(1) of the Act. The assessee claimed that it was running old age home and in addition, there were issues relating to Chapel expenses as not mandated by the trust deed. Though, the predecessor Commissioner had refused to grant registration under section 12A of the Act, but he permitted the assessee to make fresh application in form No.10A, if he so desires. The Commissioner noted that the present application in form No.10A was made for availing the said opportunity. During the course of proceedings, the Commissioner asked the assessee to furnish the details of charitable activities carried out from financial year 2010-11 to 2012-13 along with copies of bills of expenditure on activities conducted, nature of expenditure incurred on old age home, nature of Chapel expenses and explanation as to how the same were as per objects of the Trust. The assessee furnished the requisite details giving brief activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner was of the view that running of old age home perse , could not be charitable activity, unless it was demonstrated and established for the relief of the poor. He was of the view that running of old age home was also a commercial activity these days when the children of the affluent families who were not in a position to take care of parents prefer to keep them in such old age homes. The Commissioner thus, held that it was difficult to record satisfaction about the genuineness of the activities of applicant trust which was an essential pre-requisite requirement to be fulfilled for grant of registration under section 12A of the Act. Since the two conditions regarding charitable nature of the objects and genuineness of the activities were not met with, the application was rejected. 5. Another issue raised by the Commissioner was that where the trust was created vide Trust Deed executed on 20.10.2010 and registration was granted under the BPT Act on 01.04.2011, the assessee trust should have applied for registration under section 12A of the Act within one year of creation. The application was made belatedly on 31.10.2012 which was rejected vide order passed on 30.04.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Departmental Representative for the Revenue on the other hand, relied on the order of Commissioner. 9. We have heard the rival contentions and perused the record. The issue arising before us is with regard to grant of registration under section 12AA of the Act. Under the provisions of section 12A of the Act, it is provided that for allowing the exemption under sections 11 and 12 of the Act, the first condition is to be registered under section 12AA of the Act. In the pre -amended provisions, it was provided that an application for registration of the Trust or Institution is to be made within stipulated period and in case, it is not so filed within stipulated period, then the Commissioner was empowered for reasons to be recorded in writing that the application has not been filed for sufficient reasons, then the same can be applied for from the date of creation of trust or establishment of institution. However, under the proviso to section 12A(1)(a) of the Act, it is provided that the provisions of clauses shall not apply in relation to any application made on or after 1st day of June, 2007. Under the clause (AA) to section 12(1) of the Act, it is provided that a pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er at page 3 of its order and they were in three fields of education, health and relief of the poor. The Commissioner vide para 3.1 has given a finding that the objects for which the trust was created were charitable in nature. He also further gave a finding that the trust was not carrying out any activity of the nature of education and medical relief, but had only started running of old age home, which falls under the category of relief of the poor. The assessee has furnished on record various evidences with regard to its setting up of old age home and also running of old age home with senior citizens. The question to be addressed is whether the activities carried on by the assessee can be said to be charitable. Section 2(15) of the Act defines the charitable purposes to include education, medical relief and relief of the poor and other objects as charitable. Where the assessee is running an old age home and the same falls within category of relief of the poor, then it can be said that the objects of the trust are charitable in nature. Once the charitable activity is being carried on by the assessee by way of establishing an old age home which has senior citizens as its residents, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in view of this order of Commissioner, filed another application which we have referred to dated 12.11.2013. In the second round of proceedings for grant of registration under section 12AA of the Act, the Commissioner has passed an order with reference to the activities carried on by the assessee and thereafter notes that the assessee has failed to furnish the bills of expenditure on charitable activities and also it had surpluses for assessment years 2011-12 and 2012-13 on which it is liable to pay taxes. 11. Another aspect noted by the Commissioner was that the assessee had declared receipt of approximately ₹ 5 crores on the ground that these were corpus receipts in assessment year 2011-12. The Commissioner rejected the application moved by the assessee on the surmise that compliance with law was the threshold condition which the assessee must fulfill, then its case could be considered for conferment of statutory privilege. Where the assessee had not complied with law, then the application could not be considered for such privilege vis- -vis the nature of total exemption from tax under sections 11 and 12 of the Act. We find no merit in the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning old age home, then on other surmises that the assessee has claimed exemption under sections 11 and 12 of the Act without the trust being registered under section 12A of the Act, does not stand. Further, the assessee was a public trust registered under the provisions of BPT Act, 1950 and where such recognition has been given to the trust, then it is established that the assessee is carrying on its charitable activities. The assessment proceedings or determination of income in the hands of assessee stands on a different footing and for that, provisions of the Act are there. Merely because the assessee had filed its return of income and claimed certain exemptions will not jeopardize the case of assessee as far as the grant of registration under section 12AA of the Act. The assessee having moved an application for registration, which was found to be in order and where the objects of the trust are charitable and activities of the trust are genuine, for the reason that surplus has been generated by the said trust does not merit its rejection. Further, we find no merit in the order of Commissioner in denying registration under section 12AA of the Act on the ground that there was dela ..... X X X X Extracts X X X X X X X X Extracts X X X X
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