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Showing contexts for: charitable trust objects in Sunrise Shikshan Sansthan, Sikar vs Cit(E), Jaipur on 31 January, 2022Matching Fragments
(v) It is evident that at this stage, the CIT (E) is not to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of section 12A read with rule 17A and whether Form 10A has been properly filled up. He may also see whether the objects of the trust are charitable or not. At this stage, it is not proper to examine the application of income.
(vi) The Honble Allahabad High Court in the case of CIT vs. Red Rose School (2007) 163 Taxman 19 (Allahabad) held that:
10 ITA 1321/JP/2019_ Sunrise Shikshan Sansthan Vs CIT(E)
16. Now, coming to the powers of the Commissioner as to whether while granting registration u/s 12A he is required to examine the books of account etc. or he is only to satisfy himself regarding the objects of the trust and genuineness of the activities of the trust, we find various courts have held that while granting registration u/s 12A the ld. CIT is required to see only the objects of the assessee trust/society and not to examine the application of income. He is not required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit while granting registration. He is only required to examine the objects of the trust. We find identical issue had come up before the Tribunal in the case of Bhartiya Kisan Sangh Sewa Niketan (supra). In the said case also the assessee trust did not produce the books of account, bills and vouchers etc. for verification of the ld. CIT for which the ld. CIT held that the assessee society is not carrying out any charitable activities. Due to noncompliance of assessee society, the genuineness of the activities could not be verified. The ld. CIT, therefore, relying on various decisions including the decisions which have been relied on by the ld. CIT in the present case, rejected the claim of registration u/s 12A(1) of the I.T. Act. When the matter travelled to the Tribunal, the Tribunal allowed the claim of registration by holding that at this stage on granting registration u/s 12A the ld. CIT is required to see the objects of the society and not required to examine the application of income which will have to be undertaken by the Assessing Officer on a year to year basis after the assessee files the return of income claiming exemption u/s 11 of the I.T. Act.
11. We are of the view that at this stage, the CIT (E) was not to examine the application of income. All that he was required to examine was as to whether the application is made in accordance with the requirements of Section 12A read with Rule 17A and whether Form 10A has been properly filled up or not. He may also see whether the objects of the trust are charitable or not. At this stage, it is not proper to examine the application of income. In this regard, we draw strength from the decision of the Honble Allahabad High Court in the case of CIT vs. Red Rose School (2007) 163 Taxman 19 (All) wherein it was held as under:
22 ITA 1321/JP/2019_ Sunrise Shikshan Sansthan Vs CIT(E) the case of Vidyadayani Shiksha Samiti v/s CIT (Exemptions), Lucknow wherein while addressing the identical objection raised by the Ld. CIT(E), the Coordinate Bench of Lucknow, has held as under:
16. Now, coming to the powers of the Commissioner as to whether while granting registration u/s 12A he is required to examine the books of account etc. or he is only to satisfy himself regarding the objects of the trust and genuineness of the activities of the trust, we find various courts have held that while granting registration u/s 12A the ld. CIT is required to see only the objects of the assessee trust/society and not to examine the application of income. He is not required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit while granting registration. He is only required to examine the objects of the trust. We find identical issue had come up before the Tribunal in the case of Bhartiya Kisan Sangh Sewa Niketan (supra). In the said case also the assessee trust did not produce the books of account, bills and vouchers etc. for verification of the ld. CIT for which the ld. CIT held that the assessee society is not carrying out any charitable activities.