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TMI Blog2016 (9) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... istration u/s. 12AA of the Act. Just because the reply is not given as desired by the DIT, it does not mean that the trust is not genuine. Moreover, as submitted by the Ld. Counsel, various clauses of the trust operate independently and there is no confusion as made out by the DIT. In fact the DIT himself got confused in understanding the irrevocability of the trust and power of the trustees in dissolving the trust while administering the same. With reference to number of trustees also there is no confusion as trustees are empowered to enhance the initially constituted trust members to a maximum number of 18, which does not mean that there is no clarity at any given point of time. There can only be trustees as specified in the original trust deed or as enhanced by the Board keeping in view of the requirements. With reference to the foreign national being member of the trust, Ld. DR did not specify any of the law under which it is prohibited. So long as the trust objects are charitable in nature and trust activities/benefits claimed are within India, the trust can get the registration. . Considering the principles laid down on the subject and the fact that assessee’s objects are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ex-officio Members of German Consulate who would also be a Member of the Board of trustees. In view of such stipulation empowering the trust to have a foreign national in their Board, the DIT was of the opinion that trust cannot be considered as an independent/charitable institution. Considering the above, DIT refused the registration U/s. 12AA. Similar order was passed on the second application filed by assessee, dt. 28-08-2014. 4. Ld. Counsel while referring to the order of the DIT submitted that there is no objection from the DIT about the objects of the trust and assessee has been carrying on the activities as per the objects of the trust. It was his submission that the reasons stated by the DIT are not correct as assessee s activities are charitable in nature. It was further submitted that if there is any violation of the objects, the provisions of Section 11 12 would apply, but DIT was not correct in refusing the registration u/s. 12AA. In addition to the activities of the trust, Ld. Counsel also submitted that the trust does not carry out any activities outside India but only co-operates in exchange programmes. It does not mean that assessee extended its activities ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing registering the trust or institution. This Section does not refer to any other aspects which the Ld.DIT has undertaken in his order. Since there is no comment about the objects of the trust being not charitable in nature, we presume that Ld.DIT has no objection to the objects of the trust. 6.1. Coming to the genuineness of the trust, there is no doubt that the trust is genuinely constituted and is active. If there are any violations in fulfilling the objects for which it is constituted, it is the AO who has to examine while allowing the benefit u/s. 11 and 12 of the Act. While registration in accordance with the provisions of Section 12AA of the Act is a condition precedent for claiming the benefits u/s. 11 and 12 of the Act, registration as per Section 12AA by itself will not automatically confer the benefits of Section 11 and 12 of a trust, but the trust will get the benefit only on complying with the requirements of Section 11 12 of the Act, which compliance can be examined by the assessing authority while processing the return filed by the trust. So long as the trust has objects which are charitable in nature, it satisfies for registration u/s. 12AA of the Act, unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes outside India, then clause(c) will be applicable and if the permission is granted by the Board either by general or special order then, benefit can be extended. Section 12AA prescribes the procedure for registration. Reading the section, it becomes clear that after the application is made, the officer has to call for documents or information from the trust to satisfy himself about the genuineness of the activities of the trust. He can make further enquiry as he may deem necessary. It is only after satisfying himself about the objects of the trust and the genuineness of its activities that he has to pass an order in writing registering the trust or institution. And if he is not satisfied, he can reject the same. This section does not refer to the activities in India or outside India. It refers to application of income for charitable or religious purposes in India as also with direction or order of the Board for application of income as aforesaid outside India. The assessee-trust applied for registration under section 12A and recognition under section 80G. The application was rejected on the ground that the applicant itself had admitted that the scholarships could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to the fulfilment of other conditions as laid down by the different provisions of the Act, will be entitled to registration and it cannot be denied registration because of the fact that its activities are extended outside India. However, while computing the income as per the provisions of section 11 of the Act, the income which is applied on such an activities in India only, will be eligible 'for exemption and subject to the provisions of section 11(1)(c) wherein the income applied outside India is also eligible for exemption, if the activities tend to promote the international welfare in which India is interested and the approval has been granted by the Board for such application of income. However, so far as the second ground ITA No.736/M/2013 11 M/s. Critical Art and Media Practices regarding the salary received by the trustees in excess of what may be reasonably paid for such services is concerned, the matter is restored to the file of the Ld. DIT(E) for decision afresh after granting proper opportunity to the appellant trust to present its case and produce necessary evidences, if any, in this regard . We also note that the decision of the coordinate bench in ..... 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