2017 (8) TMI 247

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..... ot be refused, on the ground that the trust has not yet commenced the charitable or religious activity. Any enquiry of the nature would amount to putting the cart before the horse. At this stage, only the genuineness of the objects has to be tested and not the activities, which have not commenced. The enquiry of the Commissioner of Income-tax at such preliminary stage should be restricted to the genuineness of the objects and not the activities unless such activities have commenced. The trust or society cannot claim exemption, unless it is registered under section 12AA of the Act and thus at that such initial stage the test of the genuineness of the activity cannot be a ground on which the registration may be refused. SEE Hardayal Charitab .....

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..... was established in August 2011 with a dominant object of imparting higher medical education by establishing Medical Colleges, Hospitals and Research Centres, such charitable activities had not still been commenced. The provisions of Section 12AA have been construed in the judgments of several High Courts which have been relied upon in a judgment of a Division Bench in Hardayal Charitable Educational Trust v. CIT: [2013] 355 ITR 534/214 Taxman 655/32 taxmann.com 341 (All.). While following the view which was taken by the High Courts of Karnataka, Delhi and Punjab and Haryana, the Division Bench has held as follows: The preponderance of the judicial opinion of all the High Courts including this court is that at the time of registration .....

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..... f the trust which the Tribunal found are clearly charitable in nature. Thus, the only ground which weighed with the Commissioner in declining to grant registration has been found to be contrary to law. The Tribunal has in the circumstance while allowing the appeal directed the Commissioner to grant registration under Section 12AA. The view of the Tribunal is based on the judgment of a Division Bench of this Court which follows the consistent body of law. 3. The learned counsel appearing on behalf of the revenue has also relied upon a judgment of the Kerala High Court in the case of Self Employers Service Society v. CIT: [2001] 247 ITR 18/[2000] 113 Taxman 703. The facts in that case are clearly distinguishable. The proposal to start a .....

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