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TMI Blog2016 (10) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration u/s 12AA of the Act. The application for granting exemption under section 80G of the Act was denied for want of registration under section 12AA. Since we have restored the issue of registration for consideration afresh, the issue of exemption is also restored the file of the ld. CIT for decision afresh. - ITA No. 209 & 210/JP/2016 - - - Dated:- 25-8-2016 - SHRI KUL BHARAT, JM and SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C. Parwal (CA) For The Revenue : Shri D.S. Kothari (CIT) ORDER PER SHRI KUL BHARAT, JM. These two appeals by the assessee are directed against the two different orders of ld. CIT (Exemptions), Jaipur dated 24.02.2016. First, we take up the assessee s appeal in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects of the assessee, it can be noted that all its objects are for general public utility. However, the ld. CIT has made varius incorrect and irrelevant observations which have no relation with the grant of registration u/s 12AA. Each of such observation is explained as under :- (i) From the copy of the order dated 14.05.1986 (PB 36-37) allotting the land to the trust, it is specifically mentioned that the same is to be used by the trust for construction of school, college, hospital, dharamshala and other public utility activities. Therefore, it was incorrect on part of CIT to observe that the land has been allotted for middle school and dispensary and not for running of hospital and medical college. (ii) The assessee trust has rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rajasthan, Medical Education vide letter dated 10.07.2013 (PB 40-41). For grant of registration u/s 12AA, the CIT, as per sub-section (1) of this section is required to satisfy himself about the objectives of the trust and the genuineness of its activities. There is no finding of CIT that the objects of trust are not charitable or that the activities of the trust are not genuine. It is a settled law that at the stage of grant of registration, CIT is not required to enquire whether the condit6ion of section 11 to 13 is fulfilled or not. In present case, the various observations made by the CIT are not at all relevant for grant of registration u/s 12A and therefore his order refusing the registration is bad in law. In view of above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evaluation has not merely remained revaluation of land but it has created capital in the hands of trustees/settlers of the trust. 8. Further, while revaluating the asset, the trust has not created any reserve, instead it has increased the capital fund which gives benefit to the settlers/trustees. In the balance sheet, the capital account is showing a balance to the tune of ₹ 31.60 crores as on 31.03.2014. The applicant was asked to submit the explanation regarding creation of capital in the balance sheet. The applicant failed to submit any specific explanation on this issue and it merely said that this capital is created on account of revaluation of land. Creation of capital even by revaluation of the assets, gives huge benefit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then, the Principal Commissioner or the commissioner may by an order in writing cancel the registration of such trust or institution. This section empowers the authorities to cancel the registration already granted if provisions of sec. 13(1) become operative. Once the Act has empowered the authority to cancel the registration with reference to section 13(1), it automatically indicates that if at the time of registration, any of the conditions mentioned in sec. 13(1) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has pointed out that clauses (a) and (d) of the object clauses specifically authorize the trust to establish hospitals and colleges. It is contended that the observation that the accounts are not maintained as per Rajasthan Public Trust Act, 1959 is incorrect. It is contended by the ld. Counsel that revaluation of assets is not prohibited by Rajasthan Public Trust Act and by making revaluation of land, trustees/settlers are not benefited as it remains the capital of the assessee trust. 4.1. We have given our thoughtful consideration to the submissions. We find merit in the submission of the ld. Counsel for the assessee that the objects of the assessee of clause (a) and (d) are for establishment of hospitals and colleges. We also find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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