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TMI Blog2021 (2) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Furthermore, the activities /objects of the society have nowhere been doubted by the ld. CIT (Exemptions) which are appearing in clause 3 of the trust deed. We also find that there was specific clause in the Memorandum of Association specifying that in the event of winding up of the activities of the trust, the properties held by the trust shall be transferred to other trust having similar objects.What is transpired that necessary clauses are very much appearing in the memorandum of association as highlighted by the ld. CIT (Exemptions) in his order. Thus, it can be inferred that all the compliances as required by the ld. CIT (Exemptions) have been duly complied by the assessee. Whether the ld. CIT (Exemptions) has verified the clauses as discussed above - From the finding of the ld. CIT (Exemptions), it is transpired that he has not verified the above clauses. Assessee has made the reply to the queries referred by the ld. CIT (Exemptions) vide letter dated 03.04.2019 which is placed on record. It is also important to note that the ld. CIT (Exemptions) in his order has also made reference to such letter of the assessee dated 03.04.2019 which can be verified from the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the ld. CIT (Exemptions). The ld. CIT (Exemptions) issued a letter to the assessee calling for certain queries regarding its application for registration under section 12AA of the Act vide letter dated 06-03-2019 which was not complied in full by the assessee. Precisely, the necessary details were not furnished by the assessee as given here under: Point No. 15: Your Deed/Memorandum of Association does not have a clause that the beneficiaries are a section of the public and not specific individuals. Please include this clause in your Trust Deed/Memorandum of Association and file a certified copy of the amended Trust Deed/Memorandum of Association. Point No. 16: Your Trust Deed/Memorandum of Association does not have any clause providing that in the event of dissolution of Trust/Society/Non Profit Company, the funds/assets of the Trust/Society/Non Profit Company will be transferred only to some other Trust/Society/Non Profit Company having similar objectives. Please include this clause in your Trust Deed/ Memorandum of Association and file a certified copy of the amended Trust Deed/ Memorandum of Association. 4. In view of the above, the ld. CIT (Exemption) rejected the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration under section 12 AA of the Act. 8. The learned AR without prejudice to the above also contended that the ld. CIT (Exemptions) cannot reject the application in the absence of winding up clause in the deed of trust as there is no such requirement under the provisions of section 12AA of the Act. The learned AR in support of her contention relied on the judgment of Hon ble Bombay High Court in the case of CIT (Exemptions) Vs. Setco Foundation in Income Tax Appeal No. 926 of 2016 dated 21.01.2019. 9. The learned AR further brought to our notice that the necessary changes as suggested by the ld. CIT (Exemptions), though not required, have been made in the trust deed and accordingly, filed the changed memorandum which are placed on pages 48 to 89 of the paper book. 10. On the other hand, the learned DR submitted that the assessee in its letter dated 03.04.2019 to the ld. CIT (Exemptions) has mentioned that that the assessee is the educational and charitable trust and running primary, high school and college whereas the assessee in the submission to the tribunal vide letter dated 12.02.2020 has submitted that it is providing education to the children who are not intellectually c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the trust, it is transpired that the activities of the trust are for the purpose of the education which comes within the definition of charitable activity as provided under section 2(15) of the Act. Furthermore, the activities /objects of the society have nowhere been doubted by the ld. CIT (Exemptions) which are appearing in clause 3 of the trust deed. Thus, from the cumulative reading of the objects of the trust and fund property of the trust as appearing in clauses 3 and 18 of the trust deed, it is transpired that the beneficiaries are not the specific individuals rather than the beneficiaries represent a section of people. 17. We also find that there was specific clause in the Memorandum of Association specifying that in the event of winding up of the activities of the trust, the properties held by the trust shall be transferred to other trust having similar objects. The relevant clause 26 of the trust deed reads as under: 26. Winding up: Resolution by 3/5th majority in annual general meeting shall be necessary for winding of work of trust. The property of trust can be donated to other trust. It is necessary to comply with the procedure for winding up as per Section 13 and 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of dissolution clause in the trust deed. 5. Mr. Kotangale, the learned counsel for the Revenue very fairly states that the identical issue had arisen before this Court in Income Tax Appeal No. 247 of 2015 (CIT 2 of 3 8. os itxa 926-16.doc [Exemptions]) Vs. Tara Educational 8 Charitable Trust. The said appeal was dismissed as not giving rise to any substantial question of law. 6. In the above view, for the reasons indicated in our order in Tara Educational Charitable Trust (supra), the proposed question does not give rise to any substantial question of law. Thus, not entertained. The appeal is dismissed. 22. In view of the above, we find that the finding of the ld. CIT (Exemptions) is contrary to the facts available on record. Accordingly, it is inferred that the assessee has complied the conditions imposed under the provisions of section 12AA of the Act for granting the registration. Accordingly, in view of the above and after considering the facts in totality, we set aside the issue to the file of the ld. CIT (Exemptions) with the direction to grant registration to the assessee under section 12AA of the Act as per the provisions of law. Hence, the grounds of appeal of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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