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Aggrieved by such findings of Ld. CIT, assessee is in appeal before us now ITA no. 394 & 395/del/2014

3. Ld. AR submitted that objects of the trust for charitable in nature and drew our attention to the trust deed clause 5, which reads as under:

5. Object of the Trust.

1. To establish and run educational institutions in India and/or to contribute to such existing institution.

2. To establish libraries and reading rooms in India and/or contribute such existing institutions.

ITA no. 394 & 395/del/2014

7. It is observed that this is the first year of assessee, and at the time of filing of application for registration under section 12AA of the Act, there were no substantial activities. From the trust deed placed before us, clause 5 clearly indicates that assessee is going to establish and grant educational institutions in India and/or contribute to such existing institutions. It is also observed that Ld. CIT has not made any inference about objects of trust being non- charitable in nature. The balance sheet as on 31.03.2013 reproduced in the impugned order shows that the assessee has invested a substantial sum towards purchase of land for setting up of a school and also has received corpus donations.

8. In our considered opinion, the power of Ld. CIT under section 12AA of the Act, while considering the application for registration of trusts is limited to the extent of satisfying himself about the objects of trust, being charitable in nature. At this stage of granting registration under section 12AA of the Act, he has to satisfy himself about the objects of the institution and genuineness of the activities. He is not required to look into the utilisation of funds, commercial nature of activity etc., at that stage. These aspects are to be looked into by Assessing Officer at the time of assessment. This Tribunal in the case of Baba Educational Welfare Society (supra) has held as under:

In case of CIT vs. Red Rose school (supra), Allahabad High Court held as under:

33. In regard to the genuineness of the activities of the trust or institution, whose objects to not run contrary to public policy and are in fact, related to charitable purposes, the Commissioner is again empowered to make enquiries as he thinks fit. In case the activities are not genuine and they are not being carried out in accordance with the objects of the trust/society or the ITA no. 394 & 395/del/2014 institution, of course, the registration can again be refused. But on mere presumption and on surmises that come derived by the trust or the institution is being misused or that there is some apprehension that the same would not be used in the proper manner and for the purposes relating to any charitable purpose, rejection cannot be made.