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TMI Blog2021 (8) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the trust arises at the time of assessment by the A.O. where benefits are claimed by the assessee in terms of section 11 and 12 of the Act and AO can examine the question as to the nature of the contributions etc. at the time of assessment. At the time of registration of the assessee u/s 12AA is concerned what is to be looked into is whether the assessee trust is a genuine one or whether it is a sham institution floated only to avail the benefits of exemption under the Act. CIT(E) could have examined only the genuineness of the association and its activities postulated, are to achieve the objects for which it is created. There was no material to show that assessee (ITAT Bar Association) was not genuine or that its activities were not as professed in the MOA and AOA. There was no finding that assessee (ITAT Bar Association) was a sham entity and therefore, we are inclined to set aside the order of the Ld. CIT(E) with the direction to him to consider the application for registration u/s 12AA of the Act, de novo, by passing a speaking order in accordance to law and after giving adequate opportunity to the assessee in accordance to law. Appeal of the assessee is allowed for Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Aggrieved by the order of Ld. CIT(Exemption), the assessee is in appeal before this Tribunal. 6. Shri Rasesh Shah, Ld. Counsel for the assessee, pleads that Ld. CIT(Exemption) has denied the registration without any valid reasons. He pointed out that assessee (ITAT Bar Association- Surat) need not to be registered with charity commissioner, it need not to be registered as a section 8 Company, under the Companies Act. The assessee has its objects, such as, to promote the education among the members by holding seminars. The assessee has constructed a library, where bar members can sit and read books journals, and news- papers etc. Therefore, it satisfies the test of general public utility, as mentioned in section 2(15) of the Act. The Ld. Counsel submits before the Bench, a statement showing Deposits and Payments, vide paper book page No.22, and stated that assessee has constructed a room for office use of Bar members and for that assessee has incurred expenses. The Ld. Counsel submits that Chamber of Commerce, the Chamber of Tax Consultants etc., are not registered with the charity commissioner, although they are enjoying the status of the registration u/s 12AA of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered with any competent authority. It further contended that the trust deed need not be registered with any of the authorities. 8. The above contention of the Applicant Association is carefully considered and found unsatisfactory and untenable in the eyes of law in view of following facts. i) Before going into contention of the Applicant made above, it is relevant to go through the relevant provisions of the Act i.e. Section 12A read with Rule 17A which are reproduced hereunder. 12AA (I) The [Principal Commissioner or] Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) [or clause (ab)] of subsection (II) of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils of the trustees/managing committee to be furnished with such authority etc. In absence of such registration with any government authority, no verification of the existence, no control/supervision of government over such unregistered entity would be; there to see whether their activities are going on according to their rules and regulation or towards fulfilment of their objects. This may be not the intention of the Statute while making provisions of section 12AA rw r I7A. iii) The documents submitted by the applicant like copy of Rules and Regulation? ATM Card, annual audit report for F.Yrs 2014-15,2015-16 and 2016-17 etc. though evidencing the existence of the trust but are not documents evidencing the creation of the trust and, therefore, requirement of rule 17A is not satisfied. In view of above facts, the contention of the applicant is not found convincing and therefore rejected. 9. In view of above, in the absence of complete details/documents, it is not possible to verify the existence and genuineness of the creation of the above trust. Section 12AA makes it very clear that before granting registration under this section, the Commissioner has to satisfy hims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not necessary that the applicant applying for registration u/s 12A of the Act must necessarily be a trust. On the other hand, ld. Departmental Representative has supported the order of ld. CIT (Exemption). 5. Heard both the sides and perused the material on record. After perusal of the detailed filed by the assessee, the ld. CIT (Exemption) has rejected application filed by the assessee in form no. 10A for the approval u/s 12AA of the Act on the ground that assessee has failed to file documentary evidences to enable him to satisfy to the genuineness of its creation, its activities and to verify these activities in consonance with its objects. After perusal of the material on record, it is noticed that assessee has placed documents at pages A to T along with documents from 01 to 73 in the paper book pertaining to the specific nature and activities of the assessee as cloth merchant association which were filed before CIT(Exemption). It is also observed that the ld. CIT(Exemption) has not given any specific reasons for disproving these documents in the order passed u/s 12AA of the Act. We have gone through the decision of Hon ble Jurisdictional High Court of Gujarat in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production of evidential documents i.e. the document evidencing the creation of trust. We observe that specific evidential documents furnished by the assessee in the paper book as referred above in this order has not been verified and examined by the ld. CIT(Exemption) in the context of evidential documents. In view of the above facts and circumstances, we would deem it proper to set aside the impugned order to the file of the ld CIT(Exemption) for deciding afresh after considering the specific documents placed in the paper books as referred above. Therefore, we restore the issue to the file of the ld CIT (exemption) for adjudicating afresh after taking into consideration the observation of the Hon ble High Court of Gujarat and clause (a) in Rule 17A of the I.T. Rule, 1962. Accordingly, the appeal of the assessee is allowed for statistical purposes. 9. Thus, it is abundantly clear from the judgment of Coordinate Bench of ITAT Ahmedabad in the case of Panchkuva Cloth Merchant Association (supra), that as per provisions of section 12A of the Act r.w.s. Rule 17A of the Income Tax Rules, 1962, it is not necessary that association should be registered with charity commissioner or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f registration of the assessee u/s 12AA is concerned what is to be looked into is whether the assessee trust is a genuine one or whether it is a sham institution floated only to avail the benefits of exemption under the Act (Refer Sree Anjanaya Medical Trust vs. CIT 382 ITR 399 Ker). 11. In the light of the aforesaid case law in the case of Sree Anjanaya Medical Trust (supra) the impugned order of rejection for registration under 12AA by the Ld. CIT(E) cannot be sustained. The Ld. CIT(E) could have examined only the genuineness of the association and its activities postulated, are to achieve the objects for which it is created. There was no material to show that assessee (ITAT Bar Association) was not genuine or that its activities were not as professed in the MOA and AOA. There was no finding that assessee (ITAT Bar Association) was a sham entity and therefore, we are inclined to set aside the order of the Ld. CIT(E) with the direction to him to consider the application for registration u/s 12AA of the Act, de novo, by passing a speaking order in accordance to law and after giving adequate opportunity to the assessee in accordance to law. Statistical purposes, the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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