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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 ..... formed vide a Trust Deed executed on 28-03-2012. It sought registration u/s. 12AA of the Act by filing the application in Form No. 10A. Ld.DIT issued a questionnaire and assessee has replied to the questionnaire detailing the activities undertaken by assessee-trust. Ld.DIT was of the opinion that assessee has not given desired reply and accordingly, he was of the opinion that assessee-trust has not carried on charitable activity as per its objects. In addition to the above, the DIT also noticed that the trust intends to carry out activities outside India. The third reason considered by the DIT is that the trust is stated to be irrevocable trust under Clause-7, whereas Clause-37 empowers the trustees is to dissolve the trust. According to DIT, there is an anomalous situation in the trust Deed. The fourth reason considered by the DIT was that Clause-14 mentions that the trust shall have a minimum of two trustees and maximum of 12 trustees, whereas Clause-15 states that Board shall have the power to increase the number of trustees to any number not exceeding 18 (eighteen). Thus, he was of the opinion that there was no clarity in the trust deed about maximum number of trustees. The la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the trust deed' as these two clauses operate separately. With reference to Clause-16, about co-opted/ex-officio members, Ld. Counsel vehemently argued that there is no restriction about somebody being nominated as trustee. What is required to be examined at the time of registration is whether the objects are charitable in nature and trust is genuine or not? It was submitted that assessee deserves registration u/s. 12AA of the Act. 5. Ld. DR however, supported the arguments of the DIT as stated in the order and defended the action of the DIT. 6. We have considered the rival contentions and perused the documents placed on record. As can be seen from the order of the DIT, there is no comment/ objection about the objects of the assessee-trust. Section 12AA prescribes the procedure of 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 and objects of the trust. He can make further enquiry as he may deem it necessary. It is only after satisfying himself about the objects of the trust and genuineness of its a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stees 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. 6.2. The last objection with reference to activities being carried out outside India. This issue was considered by the Hon'ble Delhi High Court in the case of M.K. Nambyar Saarc Law Charitable Trust Vs. Union of India [269 ITR 556], wherein it was held that: "CHARITABLE PURPOSES - CHARITABLE TRUST - REGISTRATION OF TRUST -APPPLICATION OF INCOME OUTSIDE INDIA -NOT A GROUND FOR REFUSING REGISTRATION-INCOME-TAX ACT, 1961, SS. 11, 12A So far as the benefit of section 11(1)(a) of the Income-tax is concerned, it can be extended only to the extent to which such income is applied to such purposes in India. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant incidental clause relied upon by the Revenue that such clause primarily enables the assessee to raise funds to attain the main objects of the company. It does not give any impression that the assessee shall carry out its activities outside India. Be it as it may, we simultaneously notice that on this aspect also, the decision of the coordinate bench of the Tribunal in the case of Critical Art and Media Practices (supra) is in favour of the assessee. In that case, under similar circumstances, the Tribunal came to the conclusion that registration cannot be denied merely because the assessee's activities are extended outside India. Relevant portion of the said decision of the Tribunal reads as under- "13. Keeping in view of the above submissions, in our view, the second ground on which the registration is rejected needs to be relooked by the Ld. DIT(E). In view of our above observations, we hold that if the activities otherwise are charitable and fall in the definition of charitable purposes as defined under section 2(15) of the Act and further the property is held wholly and exclusively under trust for charitable and religious purposes as provided under section 11 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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