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TMI Blog2016 (8) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... f the act. 2. The assessee has raised the following grounds of appeal in ITA No. 166/Chd/2016 which is against rejection the application for registration u/s 12AA of the Income Tax Act :- 1. That on the facts, circumstances and legal position of the case and in law, the Worthy CIT has erred in passing that order in contravention of the provisions of Section 12AA of the Income Tax Act, 1961. 2. That on the facts, circumstances and legal position of the case and in law, the Worthv (TT has erred in rejecting the application of the appellant trust for grant of registration u/s 12AA of the Act on incorrect allegation that the power granted in the memorandum to Chairman to incur expenditure upto Rs. 10,00,000/- without the approval of gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of educational activities and has filed an application before the ld CIT(A) on 31.03.2015 for regsitrataion u/s 12 AA of the act. However, same was rejected vide para No. 2 and 3 of the above order giving the following reasons:- "2. As per memorandum of the society, the governing body consists of Chairman, Vice Chairman, General Secretary and Finance Secretary of the trust. As per clause 6 of the memorandum, the powers of the Governing body of the society such as : "(i) The Governing body shall be incharge of all movable and immovable properties and permanents funds of the trust. (ii) The Governing body shall purchase, take or give on lease acquire and or sell and let or exchange all properties both moveable or immoveable, tangi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for better administration and not for any benefit in his favour. Further, the trust shall invest in the funds, which are approved u/s 11(5) of the Act for claiming such exemption, and merely there being a provision of investment in shares of joint stock company does not result into the rejection of the application of the assessee. He further submitted that clause 3 itself speaks about investment which is permitted by law. He further stated that at the time of registration the ld CIT(A) needs to look at whether the object of the trust are charitable in nature or not and genuineness of the its activities. He further stated he is empowered to cancel registration at any point of time if the trust is found violating provisions of income tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. 68[(1A) All applications, pending before the 69[Principal Chief Commissioner or] Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the 69[Principal Commissioner or] Commissioner and the 69[Principal Commissioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution: Provided that the registration shall not be cancelled under this sub-section, if the trust or institution proves that there was a reasonable cause for the activities to be carried out in the said manner.] [Extracted from taxmann.com] 7. For the purposes of registration, u/s 12 AA of the act the prescribed authority should see the objects of the trust and make an inquiry about the genuineness of the activities of the trusts. Admittedly the object of the trust is education which is one of the charitable objects defined u/s 2 (15) of the Income tax Act. Furthermore, in the order under challaenge before us, there is no adverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t contain the reasons which can justify the rejection of the application of assessee trust u/s 12 AA of the Act. In view of this we direct the ld CIT (A) to examine the objects and genuineness of activities of the trust and after proper enquiry may grant registration. 8. In view of this appeal of the assessee in ITA no 166/CHD/2016 is allowed for statistical purposes. 9. Now we come to ITA No. 165/Chd/2016 wherein assessee has raised the following grounds of appeal:- 1. That on the facts, circumstances and legal position of the case and in law, the Worthy CIT has erred in passing that order in contravention of the provisions of Section 80G of the Income Tax Act, 1961. 2. That on the facts, circumstances and legal position of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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