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TMI Blog2018 (2) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. From the perception of the assessee trust the amount received as donation whether will be eligible for exemption under section 11 depends on the application of such fund for the charitable activities by the trust only. CIT is empowered to satisfy himself only about two factors i.e. the objects of the trust and the genuineness of the activities of the trust or institution and such powers does not extend to the eligibility of the trust/ institution for exemption u/s 11 r.w.s 13 which falls in the domain of the AO. Once the CIT has not doubted about the genuineness of the activities of the assessee nor doubted its charitable object, his powers under section 12AA end. We direct the CIT to grant the registration u/s 12AA and also the approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax (Exemptions), Chandigarh is against law and facts. 2. That on the facts and circumstances of the case of the Appellant, the order of the Commissioner of Income Tax (Exemptions) is not justified in denying registration of the trust u/s 12AA of the Act stating that the trust is formed merely for complying the CSR requirements of the settler company ignoring the fact that the Appellant is engaged in carrying out the charitable activity as per the object of the trust." 4. The assessee is a trust, registered vide Deed dated 27/03/15. The trust was started by the settler M/s. Veer Overseas Ltd. a limited company who in order to carry out its duties under the Corporate Social Responsibility (CSR), as provided under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements of the Companies Act has taken place in the trust so far (v) that the activities so far further show that the trust has relinquished its function, as the primary implementation agency and undertaking its own programmes to impact targeted beneficiaries, by transferring its funds to other societies (vi) it also militates against the legal principle that social enterprises cannot be a direct recipient of money from a corporate as it is a profit making company." 5. Besides the Commissioner of Income Tax (Exemptions) also rejected application u/s 80G (v) which is holding that, the application void ab initio in terms of provisions of Rule 11AA. 6. Being aggrieved by the said orders, the assessee is before us by filing two appeals. 7. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken into consideration by the Assessing Officer in assessment proceedings while granting exemption u/s 11 of the Act and not that by Commissioner in capacity of Section 12AA of the Act. The Ld. AR relied upon the following case laws: i. CIT vs Hindustan Charity Trust reported in (1983) 139 ITR 913 (Cal) ii. CIT vs Trustees of the Jadi Trust reported in (1982) 133 ITR 494 (Bom) iii. CIT vs Sarladevi Sarabhai Trust No. 2 reported in (1988) 172 ITR 698 (Guj) iv. Shri Sain Ji Dharmarth Trust Vs. CIT (2006) 8 SOT 446 (Del) v. CIT vs. Surya Educational & Charitable Trust (2013) 355 ITR 280 (P&H) vi. St. Don Bosco Educational Society vs. CIT (2004) 90 ITD 477 (Luck.) vii. Baba Gandha Singh Education Trust vs. CIT (2011) 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide for compliance of CSR provision through a dedicated trust or society. Just because the trust has been formed for complying CSR requirements it cannot per se be the reasons for denying registration under Section 12AA of the Income Tax Act. As regards the reasons (iii) given by the CIT (exemption) that the object of trust are to be noted whereby apart from the CSR activities, the Activities in the nature of eradicating hunger and poverty, promotion of education, promoting gender equality etc. are also provided. These activities are in the nature of public charity. Further, the CSR Activities itself are in the nature of public charitable activities. As regards the reasons (iv) given by the CIT (exemption), no activities in sync with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act. A profit making Company can grant certain donation to the charitable trust, how can the activities of the trust become not charitable with this act. The fact that the CSR expenditure are not allowable expenditure under section 37 of the Act is relevant only for the taxability of the company incurring such expenditure. From the perception of the assessee trust the amount received as donation whether will be eligible for exemption under section 11 depends on the application of such fund for the charitable activities by the trust only. The CIT is empowered to satisfy himself only about two factors i.e. the objects of the trust and the genuineness of the activities of the trust or institution and such powers does not extend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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