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TMI Blog2021 (8) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine and therefore, we direct the CIT (Exemptions) to grant registration u/s 12A of the Act forthwith. - Decided in favour of assessee. - ITA No.399/Lkw/2020 - - - Dated:- 26-8-2021 - Shri A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Appellant : Shri Abhinav Mehrotra, Advocate For the Respondent : Smt. Abha Kala Chanda, CIT (D.R.) ORDER PER T. S. KAPOOR, A.M. This is an appeal filed by the assessee against the order of learned CIT (Exemptions) Lucknow dated 28/10/2020. 2. The assessee has taken various grounds of appeal and are argumentative in nature but the crux of grounds of appeal is the action of learned CIT (Exemptions) by which he has rejected the application filed by the assessee u/s 12A of the Act. 3. Learned counsel for the assessee, at the outset, submitted that the only ground on which learned CIT (Exemptions) did not approve the eligibility of the instant assessee u/s 12A of the Act is that the assessee has not performed any activity in pursuance of its objects and therefore, the registration could not be granted and in this respect our attention was invited to the observations of learned CIT (Exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be construed as activity being carried out by the assessee. 5. We have heard the rival parties and have gone through the material placed on record. We find that the assessee made compliance of show cause notice dated 13/05/2020, on 01/06/2020 and the copy of show cause notice as well as its reply is placed at pages 1 to 10 of the paper book. In the reply filed before learned CIT (Exemptions) the assessee provided information and documents with respect to all queries. The learned CIT (Exemptions) did not raise any objection with respect to objects of the assessee. The only objection raised by learned CIT (Exemptions), as recorded by him in his order, are reproduced below: 3. On examination of the documents submitted online by the applicant, following have observed: That the society has been registered since 29-07-2019 and registration is valid till 28-07-2024. 4. That the applicant has filed the bank statement for a period from 01-08-2019 to 06-03-2020. On perusal of the same it is noticed that the applicant received ₹ 2,95,11,000/- and made substantial withdrawal / transfer during this period. 5. It is seen from the bank statement of the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptions) is that assessee did not file any final accounts whereas the fact is contrary as paper book page 18 is the copy of balance sheet and income expenditure account for the year ending 31/03/2020. 5.3 As regards her second observation that the assessee did not file any documents/evidences to support the activities mentioned in its note on activity of the society, it is seen that admittedly the assessee s objects are charitable in nature as is apparent from the copy of Memorandum of Association placed at pages 20 to 44 of the paper book wherein the main objects of the assessee are to impart education and moreover learned CIT (Exemptions) had no objection regarding the charitable nature of objects. Her only objection is that assessee had not carried out any activity in pursuance of its objects. In this respect we find from the copy of balance sheet, bank statement and ledger account that assessee started carrying activities in pursuance of its objects by purchasing the land and therefore, this observation is also factually incorrect. 5.3 The Hon'ble Supreme Court in the case of Ananda Social and Educational Trust vs. CIT in Civil Appeal No. 4702 of 2014 has elaborated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day. (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (ad) or clause (ab) of subsection (1) of section 12A. (3) Where a trust or an institution has been granted registration under clause (b) of subsection (1) or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently the [Principal Commissioner or] Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. [(4) Without prejudice to the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department approached the High Court by way of filing an appeal. The High Court upheld the order of the Tribunal and came to the conclusion that in case of a newly registered trust even though there was no activities, it was possible to consider whether the trust can be registered under section 12AA of the Act. This judgment is assailed before us. Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied in order to ensure that the object of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12 of the Act. In other words, if it appears that the objects of the trust and its activities are not genuine that is to say not charitable the Commissioner is entitled to refuse and in fact, bound to refuse such registration. It was argued before us that the Commissioner is required to be satisfied about two things - firstly that the objects of the trust and secondly, its act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken by the Kerala High Court in the case of Self Employers Service Society v. Commissioner of Income-tax - [2001] Vol.247 ITR 18. That view however does not commend itself. However, the facts in Self Employers Service Society (supra) suggest that the Commissioner of Income-tax had observed that the applicant for registration as a Trust had undertaken activities which were contrary to the objects of the Trust. In the result, we find that there is no reason to interfere with the impugned judgment of the High Court of Delhi. The appeal is, accordingly, dismissed. 5.4 In view of the above judgment of Hon'ble Supreme Court, the second observation made by learned CIT (Exemptions) also fails. We have already held that learned CIT (Exemptions) had no objection to the objects of the assessee which necessarily are charitable in nature and regarding the transactions in the bank account, the same are explainable and these documents were available with her. In view of the above facts we are satisfied that the activities of the assessee are genuine and therefore, we direct the CIT (Exemptions) to grant registration u/s 12A of the Act forthwith. 6. In the result, the appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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