9911796707
TMI Blog2018 (6) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, therefore, is providing and carrying out educational activities which falls within the definition of Charitable purposes as provided u/s 2(15) of the Income Tax Act. The Ld. CIT(E), however, observed that so far as no activity had been carried out by the applicant-trust in respect of its other stated objects. That running of the school was only object that was intended to be pursued by the applicant-trust. The Ld. CIT(E) examined the trust deed and found that the composition of the trust was restricted to the husband and wife who were permanent trustees. They had an unhindered power in respect of appointing and removal of other trustees. The Ld. CIT (E) further observed that even though the citations quoted to exemplify that these restrictive arrangement do not take away the charitable character, lack of any other representative in the trust either from the society / area the school was purported to serve or from amongst the elected representative from the area or the target clientele of the school etc., are pointers towards strict control over the running of school. The Ld. CIT(E) further observed that the applicant had not cited even a solitary example in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trust as a public charitable trust. That after incorporation, the trust has moved towards achievement of its charitable objectives and has started to establish a school in pursuance to its object of education. That the trustees have leased out their personal land in the school for long period of 99 years at a token yearly rent of Rs. 15,000/- per annum only. That a separate managing committee has been constituted with five members including two founder trustees. That well qualified teaching staff have been appointed and that the applicant has already been obtained various statutory approvals, got bank term loan sanctioned and has started the construction. That the primary education has been started in school by April 2016 and a reasonable fee structure has been adopted. The Ld. counsel has further relied upon Circular No. 11 of 2008 dated 19.12.2008 of the CBDT and various other case laws to contend that element of charity / altruism / eleemosynary as perceived in the general meaning of the term is not required in first three limbs of the definition of charitable purposes within the meaning of section 2(15) of the Act. He in this respect has relied on the following case laws:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffice bearers of the Trust shall draw any salary for their services rendered to the Trust. c) The Trust is required to apply its surplus, if any, for promoting its objectives. d) In case of dissolution or otherwise winding up of this trust all the Assets, interests etc. remaining on the date of dissolution / winding up can only be distributed / donated or handed over to trust / other institution whose objects are similar to those of the present Trust and which enjoys similar recognition u/s 12A or 80G of the Income Ax Act, 1961 as amended from time to time. 8. A perusal of the above clause reveals that income and property of the trust shall be applied solely towards the promotion of the objectives of the trust and no proportion thereof shall be transferred directly or indirectly to any member / trustee of the trust. The trustees shall not be entitled to any salaries for their services rendered. The surpluses, if any, will be applied for promoting the objectives of the trust and that in case of dissolution or otherwise winding up of this trust, all the assets of the trust can only be distributed / donated to a trust which enjoys similar recognition u/s 12A or 80G of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, events organized at the school. 9. We have gone through the aforesaid case laws relied upon by the Ld. Counsel for the assessee and have found that the Coordinate Beach of the Tribunal has ruled that there was not bar under the Act for registration u/s 12AA of the Act even if the trust is run by only one family unless is not established that the trust is created to run a business in the form of education and claim tax benefits. Admittedly, there exists no material no record to suggest that the activities of the assessee trust are not genuine. The CBDT vide Circular No. 14/2016 has issued certain guidelines relating to grant of approval and claim of exemption u/s 10(23C)(vi), wherein, it has been provided that there is no provision under the Act which calls for denial of exemption merely on account of extraordinary powers of Managing Trustees to appoint or remove other trustees. The relevant part of which is reproduced as under:- '5. Impact of extraordinary powers of the Managing Trustees to appoint remove or nominate other trustee. 5.1 Doubt has been expressed whether extraordinary powers to the Managing Trustees to appoint or remove other trustees and also to nominate t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
