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TMI Blog2024 (11) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ancelled without following the due process of the principles of natural justice. We are therefore of the view that the cancellation of registration already granted to the assessee trust as a religious trust which subsists till AY 2026-27 is not justified at all. We, therefore vacate this part of the Ld. CIT(E) s order. Assessee s application in Form 10AB u/s 12A(1)(ac)(v) of the Act filed before the Ld. CIT(E) on 15.04.2023 - Copy of new trust deed dated 31.03.2023 was submitted by the assessee which formed part of its reply filed on 12.09.2023 and 10.10.2023 before the Ld. CIT(E). Application for modification to enlarge the objects of the trust was also submitted to the Charity Commissioner u/s 50(A)(1) of Maharashtra Public Trust Act, 1950. The Charity Commissioner has granted permission to the modification/change in the objects of the trust vide his order dated 19.04.2023. The contention of the assessee is that the assessee filed application before the Ld. CIT(E) for change in the object clause as per the new trust deed in compliance to the requisite condition of sub-clause (a) of clause 10 of Form 10AC within the prescribed time limit of 30 days. Therefore, the application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CC on 19.04.23, trust till-to-date has not effected any change in its objects, pending permission from the Income Tax Authorities. 2. Earlier 12AB registration received as religious trust: The trust was carrying on religious activity till the time of making of application with charity commissioner dated 31st March 2023. The earlier application for 12AB provisional registration was made stating the nature of activity of the trust as religious activity only and the provisional registration was received against that application vide Unique Registration Number AADTS7194LE20217 dated 24.09.2021. As per the provisions of income tax Act 1961 exemption under section 11 is available from the income from property held for charitable or religious purpose. In view of the above, now there was no reason for the learned CIT to cancel the registration u/s 12AB on the plea that the trust has been carrying out religious activities. 3. Change in object to education: The objects of the trust are changed from religious nature to education as already communicated to the Ld. CIT at the time of hearing for 12AB renewal under section 12A(1)(ac)(v) that the objects of the trust henceforth will be of educ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the proposed objects of the trust are well within the provisions of 2(15) of the Act. 6. Natural Justice Denied: The show cause notice was received dated 05th October 2023 and response due date 10th October to which the trust has replied within due date where in was stated that the activities during the past three years were of religious nature however now onwards after change of object clause the activity of the trust will be of educational nature. However the Ld. CIT has not taken this fact into consideration and mentioned that the activity of the trust is not charitable hut of religious nature. The trust has submitted the supporting documents photographs etc of the religious activities undertaken during the past years. As on the date of application no educational activity was commenced this fact is not taken into consideration by the authority while rejecting the application. The learned CIT has not given any opportunity of being heard on his plea that the activities of the trust are not genuine. 3. The grounds are argumentative but in essence they challenge the decision of the Ld. CIT(E) rejecting the assessee s application filed before him in Form 10AB u/s 12A(1)(ac)(v) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said permission of the Charity Commissioner, the trust has not changed its objects pending permission from the Income Tax Authorities in view of the mandatory requirement of sub-clause (a) of clause 10 of Form 10AC. The Ld. AR pointed out that section 12AB registration has been granted to the trust on 24.09.2021 to carry out religious activities which is valid till AY 2026-27. The assessee trust therefore enjoys exemption u/s 11 of the Act. He strongly refuted the allegation of Ld. CIT(E) that the nature of activity of trust is not genuine and submitted that the trust has been carrying out religious activities genuinely. 7.1 The Ld. AR contended that the trust applied for permission only for change in the object clause of the trust. The Ld. CIT(E) did not consider the assessee s application in this context. Instead, he commented on the loans taken by the trust from the trustees. The Ld. AR clarified that the trustees had brought in their own funds for carrying out the religious activities. It has been ab-initio intention of the trust to bring in these funds permanently on non-refundable basis. Inadvertently, the same was shown as loans instead of donations. Now, the account has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the registration to the assessee trust was granted. Genuineness of the religious activity carried on by the assessee trust cannot be doubted as it was only after the Ld. CIT(E) was then satisfied about the genuineness of the religious activity of the trust that the registration to the trust was granted u/s 12AB of the Act on 24.09.2021. Unless and until any adverse material is brought on record which has not been done, the Ld. CIT(E) is not justified in withdrawing the registration granted to the trust u/s 12AB of the Act. Non-compliance of any other law/furnishing of incomplete or false or incorrect information has also not been noticed by the Ld. CIT(E). The issues raised by the Ld. CIT(E) in para 5 of his order are not at all relevant for the purpose of withdrawal of registration granted to the assessee trust u/s 12AB of the Act which is valid till AY 2026-27. Moreover, it is revealed from the records that the registration already granted to the assessee u/s. 12AB of the Act has been cancelled without following the due process of the principles of natural justice. We are therefore of the view that the cancellation of registration already granted to the assessee trust as a rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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