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TMI Blog2016 (5) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Act, 1961 (in short 'the Act') in Form No. 10A on 27.3.2014. The Commissioner of Income Tax, Panchkula rejected the application of the assessee for grant of registration under section 12A of the Act vide her order dated 11.8.2014. The reason given by her in the order for rejection of registration is that the trust deed had not provided for a dissolution clause for use of net assets of the trust for its objects in case of dissolution. The second objection was that the school is run by one family headed by father as Settler-cum-President and two sons as trustees. Further by stating the receipt, expenses and also surplus for the last three years, she stated that it is clear that the profit is the main motive of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rar Bilaspur. 6. That the learned CIT is not justified in rejecting the registration u/s. 12AA on the ground that Right to Education Act 2010 is not implemented, despite the fact that RTE Act is not relevant under section 12AA of the Income Tax Act, 1961. 7. For these and other reasons, that may be urged at the time of hearing, the appellant prays for relief." 4. With respect to the dissolution clause, the learned counsel for the assessee drew our attention to the copy of the trust deed enclosed with the Paper Book filed by the assessee, whereby at clause 14 the manner in which the assets of the assessee are to be disposed off at the time of dissolution are provided. No benefit to any person being Founder Member or Director is given at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the I.T.A.T., Chandigarh Bench of the Tribunal in the case of M/s. Kids-R-Kids International Educational & Social Welfare Trust v. Pr.CCIT in ITA No. 781/Chd/2015, dated 10.3.2016. 5. The learned D.R. relied on the order of the Commissioner of Income Tax and stated that the dominant object of the assessee is profit making which is quite evident from the surplus generated by it in the last few years. For the proposition that when the school was running on commercial lines under the guise of charitable purpose, no registration under section 12A of the Act should be granted. Reliance was placed on a judgment of the Kerala High Court in the case of Dawn Educational charitable Trust v. CIT (2015) 60 Taxmann.com 126 (Kerala). A judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said clause is to transfer the remaining assets and liabilities of the assessee to a similar trust at the time of dissolution. There is no intention of giving benefit to a specific person out of whatever remains in the hands of the assessee trust. Therefore, we see no reason for doubting the said clause. 9. The second objection raised by the Commissioner of Income Tax is as follows: "b) The School is run by one family headed by father as 'Settlor cum President and two sons as Trustees. Profit is the main motive as is clear from the table below showing surplus in last three years:-- F. Y. Receipt Expenditure Surplus 31.03.2011 78,65,346 77,10,068 1,55,278 31.03.2012 96,05,110 94,21,111 1,83,999 31.03.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieties Registration Act, 2012." 12. In this regard, we find ourselves in agreement with the arguments of the learned counsel for the assessee that the provisions of Haryana Registration & Regulation of Societies Registration Act, 2012 are applicable to the society only. The assessee is a trust formed under the Indian Trust 1882 and has been duly registered with Sub-Registrar, Bilaspur. There is no bar under the Income Tax Act to give registration under section 12A of the Act to a trust. There is no provision which says that only societies can be registered under section 12A of the Act. Therefore, we do not find this objection raised by the Commissioner of Income Tax being as per law. 13. The last objection raised by the Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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