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5. We have heard the rival submissions and perused the material available on record. A perusal of the impugned order shows that the Ld. C.I.T. (E) has denied the benefit of registration u/s 12AA of the Act on the sole ground that the President and the Managing Trustee were to be chosen from the two families viz. family of late Shri Moti Ram Ghiraiya and late Shri Lala Dhanik Ram Ghiraiya. As per the Ld. C.I.T. (E), this was in the nature of revocable transfer which was not permissible in view of section 63 of the Act. However, it is seen that the Ld. C.I.T. (E) has not examined the objects of the trust vis-a-vis they being charitable in nature, nor has the Ld. C.I.T. (E) recorded any finding regarding the genuineness of the objects of the Trust. The ITAT Jodhpur Bench in the case of Smt. Mansukhi Devi Bihani Jan Hitkari Trust (supra) had an occasion to examine an identical issue where the registration u/s 12AA of the Act was rejected solely on the ground that the Board of trustees was constituted of family members and there was a clause in the deed of Trust that in the case of vacancy in the Board of trustees, the remaining trustees were to co-opt another person from the very family of the outgoing trustee. The ITAT Jodhpur Bench went on to hold that this cannot be a valid reason for refusing registration to a Trust which was created having the main objective of charitable purpose. The relevant observations of the ITAT are contained in Para 8 of the aforesaid order and the same are being reproduced hereunder for a ready reference:-

"8. In the present case, it is not in dispute that the application had been furnished in the prescribed Form No. 10A within the time allowed under s. 12A of the IT Act, 1961 r/w r. 17A of the IT Rules, 1962. It is also not in dispute that the documents evidencing the creation of the trust was filed along with Form No. 10A. The learned CIT has also not doubted the objects I of the trust and also has not stated that the trust was not created for public charity and its income had not been utilised for that purpose or the property held by it was used for the benefit of the trustees or their families but the only objection of the learned CIT was that in the event of vacancy, the trustees shall co-opt another person out of the family members of that person to fill up the vacancy. That reason cannot be a valid ground for refusing registration to a trust which is created having the main object of charitable purpose. In view of clear provisions of law referred to above, we are of the considered view that registration under s. 12AA of the IT Act, 1961 cannot be refused to trust on the basis that there is a clause in the trust deed that in the event of a vacancy in the board of trustees, another family member of the trustee can be co-opted from the very family of the outgoing trustee. While taking such a view, we are fortified by the judgment of Hon'ble Allahabad High Court in the case of Fifth Generation Education Society vs. CIT (supra), wherein it has been held that the CIT was required to see as to whether the objects of the trust were charitable or not. He was further required to see as to whether the application was made in accordance with the requirements of s. 12AA of the IT Act, 1961 r/w r. 17 of the IT Rules, 1962. Furthermore, it has been held in the said case that the CIT was not required to examine the application of income."