9911796707
TMI Blog2024 (10) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... t of shops is an activity permitted under clause 7(xii) of the Trust deed and such income has been used for the main objects of the Trust and it cannot be said that the trust has violated the provisions of Sec 12AA(3). It is also noteworthy to mention that the trustees who are residing in small quarters of the trust property are rendering full service to the Trust and they are not getting salary against such service and in spite of this they are bearing electricity, water bills and maintenance charges of the trust building and in order to meet the requirement of capital expenditure such persons also provided interest free deposit which does not show that there is misuse of the trust property. These comments of the ld. CIT(E) did not doubt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(Exemptions) has not given adequate opportunity to the assessee to explain his side. 5. That the appellant be allowed to add, alter, amended, modify or withdraw any of the grounds of appeal before or at the time of hearing of this appeal. 6. That appellant prays for justice. 2.1 Apropos to the grounds of appeal of the assessee, it is noticed that the ld. CIT(E) while disposing of the appeal of the assessee trust held that the activities of the trust are not as per the objects of the trust deed and therefore, are not genuine. The property and income of the Trust have been used for the personal benefit of the trustee. The ld. CIT(E) thus felt that provisions of Section 12AA(3) and 12AA(4) are attracted in assessee s trust and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for last many years. From the above facts, it can be seen that the trust is not carrying out the activities as per the objects of the trust. Further, the main source of income of the trust is coming from rental income from shops which is not at all the object of the trust. This further strengthens the fact that the activities of the trust are not as per the objects. The claim of the assessee that the rental income is feeding the charity is irrelevant as after the introduction of proviso to Section 2(15), the predominant activity test is to be applied. It is also important to note that the major portion of the income of the trust is from rental income. This establishes that the predominant activity of the trust is to earn rental income wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the four concerns of the provisions of ss. 12AA(3) and 12AA(4) of Income-tax Act, 1961. 1.9 The learned CIT (Exemption) has given the details of receipts or income of the Trust for F.Y. 2012-13 to F.Y. 2014-15 in para 15.4 of his order. There being receipts from the Hospital activities, though less, it cannot be said that the activities of the trust are not genuine or alternatively are not being carried out in accordance with the objects of the trust. 1.10 The letting of shops is an activity permitted by clause 7(xii) (1) of the Trust Deed (para 30 of Paper Book) and such income has been used for the main objects of the trust. It therefore, cannot be said that the Trust has violated the provisions of s.12AA(3) of Income- tax Act, 1961. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner, Devasthan Vibhag, Udaipur dated 09.03.2010 44 57 8. Copy of Audit Report Audited Balance Sheet and P L A/c for F.Y. 2012-13 to F.Y. 2015-16 58 94 9. Copies of decisions 95 107 2.3 On the other hand, the ld. DR supported the order of the ld. CIT(E). 2.4 After hearing both the parties and perusing the materials available on record, it is noted from the submissions as well as the paper book of the assessee that there is receipts from the hospital activities although less but it cannot be said that the activities of the trust are not genuine and the objects of the trust are not being carried out as per objects of the trust. It is noted that the letting out of shops is an activity permitted under clause 7(xii) of the Trust deed (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefits 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 activities are genuine. If there have been no activities undertaken by the trust then the Commissioner cannot assess whether such activities are genuine and therefore, the Commissioner is bound to refuse the registration of such a trust. We have given our anxious consideration to the above submissions made by Ms. Aishwarya Bhati, learned Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
