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TMI Blog2017 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of Ld. CIT under section 12AA of the Act, while considering the application for registration of trusts is limited to the extent of satisfying himself about the objects of trust, being charitable in nature. At this stage of granting registration under section 12AA of the Act, he has to satisfy himself about the objects of the institution and genuineness of the activities. He is not required to look into the utilisation of funds, commercial nature of activity etc., at that stage. Thus we direct Ld. CIT to grant registration under section 12AA of the Act to the assessee. - Decided in favour of assessee. - I.T.A. No. 394 & 395/Del/2014 - - - Dated:- 9-2-2017 - SH. N. K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Ld. CIT on perusal of the income expenditure account filed by the assessee along with the balance sheet as on 31.03.2013, observed that, is there was no charitable activity that has been carried out, or any activity that could qualify for registration under section 12AA of the Act. He therefore, denied the registration on the ground that the genuineness of the activities did not arise. Aggrieved by such findings of Ld. CIT, assessee is in appeal before us now 3. Ld. AR submitted that objects of the trust for charitable in nature and drew our attention to the trust deed clause 5, which reads as under: 5. Object of the Trust. 1. To establish and run educational institutions in India and/or to contribute to such existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on the basic of religion, race caste crede, sex or place of birth etc. 4. He submitted that the trust has been formed on 08.02.2012 by the trustee, and its main object was to promote education. Ld. AR submitted that for purpose of this object, assessee purchased land measuring 0.819 hact., which has been shown as fixed asset in the balance sheet as on 31.03.2013. He further submitted that the trust was in the process of constructing school. Ld. AR placed his reliance upon an order dated 18.02.2016 passed by coordinate bench of this Tribunal in the case of Baba Educational Welfare Society Vs. ITO in ITA No. 2932/del/2015. He also placed reliance upon the decision of Hon ble Allahabad High Court in the case of Hardayal Charitable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to genuineness of the objects and not the activities unless such activities have commenced. The trust of the society cannot claim exemption, unless it is registered under section 12AA of the Act and thus at such initial states that test of the genuineness of the activity cannot be a ground on which the registration may be refused. 7. It is observed that this is the first year of assessee, and at the time of filing of application for registration under section 12AA of the Act, there were no substantial activities. From the trust deed placed before us, clause 5 clearly indicates that assessee is going to establish and grant educational institutions in India and/or contribute to such existing institutions. It is also observed that Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 A cannot step into the shoes of the AO to examine whether assessee has carried out any activity with profit motive or there is violation of conditions laid down under section 11 of the Act. From the order of the DDIT (E), it is clear that he has not found any adverse material to show that the main objects of the assessee are not of charitable nature or its activities are not genuine. That being the case the denial of exemption cannot be upheld. In case of CIT vs. Red Rose school (supra), Allahabad High Court held as under: 33. In regard to the genuineness of the activities of the trust or institution, whose objects to not run contrary to public policy and are in fact, related to charitable purposes, the Commissioner is again empowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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