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TMI Blog2018 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The arguments of Learned D. R. that the assessee had not produced books of account and vouchers is not having any force. At the time of registration, the CIT (Exemptions) is required to examine the objects of the assessee which in the present case are entirely charitable as the company is section 25 company As in the case of CIT vs. Red Rose School [2007 (2) TMI 575 - ALLAHABAD HIGH COURT] as held that CIT (Exemptions) has to satisfy himself about the genuineness of the activities of the trust and also the objects of the trust or institution. CIT (Exemptions) is empowered to make inquiries, as he thinks fit, to verify as to whether the activities are genuine or not but on mere presumption and surmises that income derived by the trust or institution will be misused or that there is some apprehension that the same would not be used in a proper manner, cannot be made a basis for rejection of registration. The genuineness of the activities of trust or institution has to be seen keeping in mind the objects thereof which necessarily means that the CIT (Exemptions) shall satisfy himself about the fact that the activities are genuine and in consonance with the objects of the trust or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the application of the assessee. It was submitted that at the time of registration CIT (Exemptions) is required to examine the objects of the assessee and also the genuineness of its activities with respect to its activities relating to achievement of its main objects. Reliance in this respect was placed on a number of case laws as contained in pages 1 to 58 of the paper book. Our specific attention was invited to the judgment of Hon'ble High Court in the case of CIT vs. Red Rose School [2007] 212 CTR (All) 394 for the proposition that at the time of registration the only requirement is to examine the objects and the genuineness of the activities 3. Learned D. R., on the other hand, heavily relied on the order of CIT (Exemptions). He specifically relied on para 2 of the order wherein CIT (Exemptions) had noted that assessee had not provided any bills and vouchers and had not provided any books of account. Learned A. R. in his rejoinder invited our attention to the copy of query letter dated 23/06/2016 and invited our specific attention to point No. 12 wherein CIT (Exemptions) required the assessee to produce documents, bills and books of account etc. Learned A. R. inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution. The Hon'ble court has further held that CIT (Exemptions) is empowered to make inquiries, as he thinks fit, to verify as to whether the activities are genuine or not but on mere presumption and surmises that income derived by the trust or institution will be misused or that there is some apprehension that the same would not be used in a proper manner, cannot be made a basis for rejection of registration. Hon'ble court has further held that the genuineness of the activities of trust or institution has to be seen keeping in mind the objects thereof which necessarily means that the CIT (Exemptions) shall satisfy himself about the fact that the activities are genuine and in consonance with the objects of the trust or institution. The relevant findings of Hon'ble court are reproduced below: 21. Section 12AA, which lays down the procedure for registration, does not speak anywhere that the CIT, while considering the application for registration, shall also see that the income derived by the trust or the institution is either not being spent for charitable purpose or such institution is earning profit. The language used in the section only requires that activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be exempted under sub-clause (a) or (b) of Sub-section (i), can still be exempted, if the conditions attached to Sub-section (2) in its Sub-clauses (a) and (b) are complied with. 24. Sub-section (3) again says that if any income referred to in Sub-section (2) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or ceases to remain invested or deposited in any of the forms or modes specified in Subsection (5), or is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in Clause (a) of that sub-section or in the year immediately following the expiry thereof, or is credited or paid to any trust or institution registered under Section 12AA or to any fund or institution or trust or institution registered under Section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in Sub-clause (iv) or Sub-clause (v) or Sub-clause (vi) or Sub-clause (via) of Clause (230 of Section 10, shall be deemed to be the income of such person of the previ ..... 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