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TMI Blog2018 (11) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... or elsewhere are to be seen by the Assessing Officer at the time of assessment proceedings on yearly basis and not by the CIT (Appeals) while granting registration under Section 12A of the Act. Since we observe that no adverse remarks have been made by the Commissioner of Income Tax (Exemptions) with regard to the objects contained in Memorandum and as stated hereinabove that the observations of the Commissioner of Income Tax (Exemptions) do not lead to the conclusion that the activities of the assessee are not genuine, we hereby direct the Commissioner of Income Tax (Exemptions) to grant registration under Section 12A - Decided against revenue. - D.B. Income Tax Appeal No. 173/2018 - - - Dated:- 10-7-2018 - Mr. Justice Kalpesh Satye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-16 and 2016-17, neither the assessee was registered u/s 12AA nor approved u/s 12(23C)(vi). 4. We have gone through the order of the tribunal. 5. While considering the matter, the tribunal has observed as under:- 18. A perusal of the above clarification issued by CBDT and which is binding on the ld CIT(E) shows that while examining that an educational institution exists solely for educational purpose or for the purpose of the profit, mere generation of surplus from year to year cannot be basis to hold that it exists for the purpose of the profit as sufficient safeguards have been provided whereby accumulation of income is permissible subject to the manner prescribed therein provided such accumulation is to be applied wholly and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held as under: 4. The matter has been examined by the Tribunal after perusing the relevant statutory provisions. It has been categorically recorded by the Tribunal that the CIT(E) has to satisfy two conditions while granting registration under Section 12AA of the Act. Firstly, whether the objects of the assessee are charitable in nature and thus, the activities are genuine. It cannot be concluded on the basis that the assessee has not filed its income tax returns in earlier years that the activities of the assessee are not genuine. It has been further recorded that Section 13 of the Act comes into play at the time of granting exemption under Section 11 of the Act and not at the time of granting registration under Section 12AA of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for denying registration under Section 12A of the Act. With regard to the second objection raised by the Commissioner of Income Tax (Exemptions) that as per clause-12 of the Memorandum of trust, the trustees have been given absolute powers to manage the property. We have perused the clause-12 of the Memorandum of the trust, whereby the trustees are authorized to demise the immovable property or properties of the trust either from year to year of for any fixed term or for any term of year or on monthly basis at such rent and subject to such conditions as they deem fit and proper and also accept surrender of lease and may manage the property as they think proper. From the perusal of this clause, we observe that the trustees have been give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in case of Sree Anjaneya Medical Trust (Supra) where the Hon'ble High Court has held as under: 10. It is clear frm a plain reading of Sections 12A and 12AA of the Act that what is intended thereby is only a registration simpliciter of the entity of a trust. This has been made a condition precedent for the claiming of benefits under the other provisions of the Act regarding exemption of income, contribution, etc. No examination of the modus of the application of the funds of the Trust or an examination of the ethical background of its settlers is called for while considering an application for registration. The stage for consideration of the relevance of the object of the Trust and the application of its funds arises at the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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