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TMI Blog2018 (7) TMI 1618X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. Commissioner of Income Tax (E) has not examined the assessee’s application for registration in light of the genuineness of the objects of the Trust. Accordingly, we deem it fit to restore the issue to the file of the Ld. C.I.T. (E) with a direction to re-examine and reconsider the assessee’s application for registration after duly examining the objects of the assessee trust and also after duly considering the order above - decided in favour of assessee for statistical purposes. - ITA No. 3514/Del/2015 - - - Dated:- 24-7-2018 - SHRI G.D. AGRAWAL, HON BLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Dr. Rakesh Gupta, Adv. Shri Somil Aggarwal, Adv. Shri Deepesh Garg, Adv For The Respondent : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Shri Moti Ram Ghiraiya and late Shri Lala Dhanik Ram Ghiraiya. Ld. Commissioner of Income Tax (E) noted that, thus, in view of the trust deed, the position of the President and the Managing Trustee had been reserved only for the descendents of the two families. It was further noted that since the overall control of the trust was in the hands of the two families, it was practically not possible to ascertain the genuineness of the activities of the Trust. The Ld. CIT (E) also noted that this provision in the Trust Deed made it a revocable transfer in terms of section 63 of the Act. The Ld. Commissioner of Income Tax (E) proceeded to deny the benefit of registration to the assessee Trust. 2.1 Now, the Trust has approached the ITAT and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there was no adverse inference drawn by the Ld. C.I.T. (E) with respect to the genuineness of the objects of the Trust. It was further submitted that the Jodhpur Bench of the ITAT had held that the registration u/s 12AA of the Act could not be rejected only for the reason that the Board of trustees was constituted of family members and there was a clause in the Trust Deed that in case of a vacancy in the Board of trustees, the remaining trustees were to co-opt another person from the very family of the outgoing trustee. Reliance was placed on the order of the ITAT Jodhpur Bench in the case of Smt. Mansukhi Devi Bihani Jan Hitkari Trust vs C.I.T. reported in 94 ITD 0001 (Jodh) in this regard. It was prayed that suitable directions may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey being charitable in nature, nor has the Ld. C.I.T. (E) recorded any finding regarding the genuineness of the objects of the Trust. The ITAT Jodhpur Bench in the case of Smt. Mansukhi Devi Bihani Jan Hitkari Trust (supra) had an occasion to examine an identical issue where the registration u/s 12AA of the Act was rejected solely on the ground that the Board of trustees was constituted of family members and there was a clause in the deed of Trust that in the case of vacancy in the Board of trustees, the remaining trustees were to co-opt another person from the very family of the outgoing trustee. The ITAT Jodhpur Bench went on to hold that this cannot be a valid reason for refusing registration to a Trust which was created having the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a view, we are fortified by the judgment of Hon ble Allahabad High Court in the case of Fifth Generation Education Society vs. CIT (supra), wherein it has been held that the CIT was required to see as to whether the objects of the trust were charitable or not. He was further required to see as to whether the application was made in accordance with the requirements of s. 12AA of the IT Act, 1961 r/w r. 17 of the IT Rules, 1962. Furthermore, it has been held in the said case that the CIT was not required to examine the application of income. 5.1 Thus, in the above case, it has been held that the Trust could not be denied registration u/s 12AA of the Act merely on the ground that the Board of trustees was to be constituted of family ..... X X X X Extracts X X X X X X X X Extracts X X X X
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