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TMI Blog2016 (1) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... plied 85% of its income for charitable purposes nor accumulated the same as per section 11(2) of the Income Tax Act. Further, Ld. CIT stated that a report had been called from the Income Tax Officer (Exemptions), who had not recommended granting registration since the assessee trust had failed to furnish information / documents as desired. Therefore, Ld. CIT held that the assessee was not eligible for registration u/s 12A of the Act. 3. Before us Ld. AR argued that the Ld. CIT could not have refused registration for the reasons stated. Ld. AR submitted that the application for registration is required to be made within one year of creation of the trust or society and there is no requirement that the trust or society should have started all its envisaged activities in the first year itself. According to Ld. AR, u/s 12 A / 12AA of the Act, satisfaction regarding genuineness of the activities of the trust / society is to be seen and the stage for application of income is yet to arrive i.e. when the trust or society files its return. Ld. AR argued that the Ld. CIT had to only consider whether the objects of the assessee trust were genuine or not. Ld. AR stated that as per section 12A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its coming into existence. We find that the issue of refusal of Registration u/s 12A for not carrying out the stated charitable activities in identical circumstances has been dealt with by the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. BKK Memorial Trust (2013) 29 Taxmann.com 286 (Hon'ble High Court of Punjab & Haryana), wherein the Hon'ble High Court has held as under:- "6. A perusal of the facts depicts that the Trust was created on 23.6.2010 and application under Section 12A(1) (aa) of the Act was moved on 19.7.2010 and the same was rejected on 26.11.2010. This Court in ITA No.710 of 2010-Commissioner of Income Tax-II, Chandigarh Vs. M/s Surya Educational & Charitable Trust, decided on 5.10.2011 has held that the application for registration is required to be made within one year of the creation of the Trust and there is no requirement that the Trust or the institution should have started all its envisaged activities in the first year itself. Under Section 12AA of the Act satisfaction regarding the genuineness of the activities of the Trust is to be seen and the stage for application of income is yet to arrive i.e. when such Trust or Institution files its r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions or from other sources. Therefore, the principles laid down for excluding the income from consideration under Section 10(22) now 10(23)(C) or Sections 11 and 12 are not applicable while considering the application for registration under Section 12AA of the Act. The application for registration is required to be made within one year of the creation of the Trust. Section 12AA of the Act, requires satisfaction in respect of the genuineness of the activities of the Trust, which includes the activities which the Trust is undertaking at present and also which it may contemplate to undertake. The insertion of subsection (3) to Section 12AA of the Act, clarifies the said fact, when it empowers the Commissioner to cancel the registration if the activities of the Trust are not carried out in accordance with such objects. Therefore, the object of Section 12AA of the Act, is to examine the genuineness of the objects of the Trust, but not the income of the Trust for charitable or religious purposes. The stage for application of income is yet to arrive i.e. when such Trust or Institution files its return. Therefore, we find that the judgments referred to by the learned counsel for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstant case the Society was in nascent stage and it is not required under law that the Society should have started all its envisaged activities in the first year itself. In our considered view, the decision of the Hon'ble Jurisdictional High Court referred to above is squarely applicable to the facts of the present case. Respectfully, following the judgement of Hon'ble Jurisdictional High Court in the case of CIT v B.K.K. Memorial Trust (supra), we hold that the Commissioner of Income Tax could not have refused grant registration u/s 12A / 12AA of the Act to the assessee society for the reason that it had not carried out any charitable activities. Further we find that the Ld. CIT had refused registration also for the reason that the assessee had not applied 85% of its receipts for charitable purpose nor accumulated the same for application in future years, as per the provision of section 11 of the Act. The provision of section 12AA are very clear, as per which the only mandate given to the CIT before granting registration is to satisfy himself about the genuineness of the objects of the Trust and the activities of the Trust. Ld. CIT has only to see whether the objects of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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