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TMI Blog2023 (2) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... has recorded its satisfaction as the trust fulfills following two basic conditions for grant of registration under Section 12AA of the Act, 1961:- 1. The object of the trust 2. the genuineness of the activities of the trust/institution. The Commissioner was not to examine with respect to genuineness of the activities of the trust and whether the trust, if transfers fund to another charitable society, can be given exemption under Section 11 of the Act, 1961. This power is restricted only to the Assessing Officer. Hence, in the present case, no useful purpose would be served to remand the matter back to the Commissioner to pass appropriate orders of registration of the trust under Section 12AA of the Act, 1961. The Tribunal, thus, has rightl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and poverty, promotion of education, promoting gender equality etc. Apart from this it is also provided that the trust may carry on other activities as prescribed by the government in exercise of the powers conferred under clause (o) and (q) of Sub-Section 3 of Section 134 read with Section 135 and sub section (1) or (2) of Section 469 of the Companies Act 2013 shall also be perused. An application for grant of registration u/s 12AA was filed before the CIT (exemption) Chandigarh, as on 28/03/2016. He rejected the application for grant of registration under Section 12AA of the Act, 1961 on the ground that the assesee trust has been formed by the settler M/s Veer Overseas Ltd. for the purpose of carrying out its CSR activities vide order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act provide for compliance of CSR provision through a dedicated trust or society. Just because the trust has been formed for complying CSR requirements it cannot per se be the reasons for denying registration under Section 12AA of the Income Tax Act. As regards the reasons (iii) given by the CIT (exemption) that the object of trust are to be noted whereby apart from the CSR activities, the Activities in the nature of eradicating hunger and poverty, promotion of education, promoting gender equality etc. are also provided. These activities are in the nature of public charity. Further, the CSR Activities itself are in the nature of public charitable activities. As regards the reasons (iv) given by the CIT (exemption), no activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Income Tax Act. A profit making Company can grant certain donation to the charitable trust, how can the activities of the trust become not charitable with this act. The fact that the CSR expenditure are not allowable expenditure under section 37 of the Act is relevant only for the taxability of the company incurring such expenditure. From the perception of the assessee trust the amount received as donation whether will be eligible for exemption under section 11 depends on the application of such fund for the charitable activities by the trust only. The CIT is empowered to satisfy himself only about two factors i.e. the objects of the trust and the genuineness of the activities of the trust or institution and such powers do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving funds to any other charitable society, is a question to be considered by the Assessing Officer and this aspect is not to be gone into by the Commissioner under Section 12AA of the Act, 1961. Now the only substantial question of law arises is as to whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is correct in directing the CIT(E) to grant registration u/s 12AA of the Act instead of reverting it back for re-examination in the light of judgment of The Hon'ble Allahabad High Court in A ppeal No. 112 of 2013 in the case of CIT, Meerut Vs. M/s. A.R.Trust, Meerut , wherein it was held that the Tribunal could have ordered for setting aside the order of Registering Authority refusing registration b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 because if the Appellate Tribunal is given such wide powers to direct registration of Trust in all or any circumstances, it would render the provisions of Section 12(AA) otiose, which again can not be the intention of legislature. 31. In view of the above the answer to questions referred are answered as under:- (i) The income tax Appellate Tribunal while hearing an Appeal under Section 254(1) in a matter where registration under Section 12(AA) has been denied by Commissioner income tax can itself pass an order directing commissioner to grant registration in case the income tax Appellate Tribunal disagrees with the satisfaction of the Commissioner on the basis of material already on record before the Commissioner. However the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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