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TMI Blog2025 (2) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... dv ORDER UPON hearing the counsel the Court made the following. 1. Delay condoned. 2. This petition arises from the judgment and order passed by the High Court of Judicature for Rajasthan, Jaipur Bench, Jaipur dated 18th July, 2017 in DB Income tax Appeal No. 533 of 2009 by which the appeal filed by the Revenue came to be dismissed thereby affirming the judgment and order passed by the ITAT answering the question of law in favour of the assessee and against the revenue. 3. The short point that falls for our consideration in the present petition is relating to the true and correct interpretation of Section 12-AA of the Income Tax Act, 1961 (for short the "Act 1961"). 4. The respondent herein assessee claims to be a charitable trust eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar/2008-09/999 & 1379 dated 01.08.2008 & 25.08.2008 respectively, requiring to furnish the details of Income & Expenditure account along with notes on activities carried out by the trust from its inception. On the fixed date, Shri J.N. Goyal, Secretary of the trust appeared on 14.08.2008 and later on Shri Rajeev Goyal, Advocate attended on 27.08.2008. Shri J.N. Goyal filed a written submission that the trust is a new one so past three years accounts are not available. It was submitted that corpus fund has not been utilized. Donation of Rs. 25,000/- was given by Shri J.N.Goyal himself for which no receipt was issued by the trust. The office rent was paid to Rajiv Goyal for which no receipt was obtained. Scholarship and books were given to po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner to be satisfied of the genuineness of the activities of the trust or institution. Under these circumstances rejection of the application cannot be termed as illegal or arbitrary." From the above facts as discussed in forgoing paragraphs, it may be observed that in absence of any genuine activity carried by the trust the activities of the trust cannot be said to be of charitable nature as of now. It may be noted that Section 12AA(1) (b) speak as under:- "(b) after satisfied himself above the objects of the trust or institution and the genuineness of its activities, hei) Shall pass an order in writing registering the trust or institution; ii) ii) Shall, if he is not so satisfied, pass an order in writing refusing to regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kerala High Court in self Employers service society vs. CIT 247 ITR 118 head note of the judgment reads as under: "In the present Case, admittedly, the society has not done any charitable work during the relevant period, on the other hand, the activities which they have carried on during the period were only for the purpose of generating income for its members. There were no materials before the Commissioner to be satisfied of the genuineness of the activities of the trust or institution. Under these circumstances, rejection of the application cannot be termed as illegal or arbitrary." 3.1 However, tribunal while considering., the matter has rightly considered the very object of the registration in para no.4 and held as under: "We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITR 634 (All.)" 2. New Life in Christ E. Association Vs. CIT 246 ITR 532 (Guj.) 3. N.N. Desai Charitable Trust vs. CIT 246 ITR 452 (Guj.)" 4. We are of the view that observations made by the Tribunal that Commissioner cannot comment about genuineness of its activity and he has not pointed out any defect in the clauses or the trust deed. The activity will be carried out only after the trust is registered. 5. In that view of the matter, we are in complete agreement with the view taken by the Tribunal. The issue is answered in favour of the assessee and against the department. 6. The appeal stands dismissed." 8. In such circumstances, referred to above, the revenue is here before this court with the present petition. 9. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e finding that an activity or activities actually carried on by the trust are not genuine being not in accordance with the objects of the trust. Similarly, the situation would be different where the trust has before applying for registration been found to have undertaken activities contrary to the objects of the trust." 10. The learned ASG would submit that the statement of law contained in para 12 that the terms "activities" in the provision includes "proposed activities" is prima facie not correct. According to him at the time of seeking registration under Section 12-AA, the authority must be subjectively satisfied as regards the objects and activities of the Trust. In other words, the objects and activities should be found to be genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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