Document Fragment View

Matching Fragments

1. The assessee is a private trust as per the trust deed. Therefore, the trust cannot registered under the IT Act. As such the trust is found to be involved in specific violation under clause 'e' of explanation to sub- section 12AB(4).

..........As per discussions in para 7.3

1. The assessee is not registered with charity commissioner under the BPT Act. Further, it is not even registered under any other Act relevant to Public Charitable activities. Therefore, the same is violation of section 12AB(1)(b)(i)(B) By not registering itself with the Charity Commissioner or any other relevant law applicable to the Public Trust, the assessee is found to be involved in specific violation under clause 'f of explanation to sub-section 12AB(4) ..........As per discussions in para 8.7

35. So far as the next objection of the Ld. CIT(E) that the assessee is not registered with the Charity Commissioner under BPT Act is concerned, it is an admitted fact that the assessee truest has not been registered under the BPT Act. However, it is also an admitted fact that the trust was enjoying the benefits of sections 11 to 13 of the Act in the past years and there was no requirement of registration under that Act. We find the Hon‟ble Bombay High Court in the case of CIT vs. Agricultural Produce and Market Committee, Hinganghat & Ors. reported in 291 ITR 419 (Bom) has held as under:

38. We find the Budget speech of Hon‟ble Finance Minister in 2019 also spells out the intent by stating that it is proposed to provide for cancellation of registration of the trust or institution under the Act for violation of such provision of any other law, where an order holding that such violation has occurred is either not contested or has become final. In the present case, there is no such order.

39. We further find the word used is "such requirements". The requirements have to be material for the purpose of achieving its objects. "Material" has been defined in the Legal Glossary as of such significance as to be likely to influence the determination of a cause. Registration under BPT Act is not material. If the mandate was as considered by the CIT(E), then the trust shall operate in breach as there would be a number of statutes whether Central, State or Local where the trust may never be registered. Further, a trust operating in multiple States may find itself liable to register in each such State. This in our opinion is not envisaged by the provisions. The present trust has been a trust in operation since 1930 and has been registered under the Income Tax Act since 25.08.1975 and never has this issue been questioned including while granting registration on 24.09.2021.

40. So far as the decision in the case of New Noble (supra) referred to by the Ld. CIT(E) is concerned, the same in our opinion is not applicable as that was a case of fresh registration while this is a case of cancellation of registration based on no change in facts. Further, that was a case of registration u/s 10(23C) while the instant case is a case of registration u/s 12AB. New Noble and it was a case of a pure educational trust which could have a State law which directly applies to education whereas in the instant case it is not so. We find the question before the Hon HC was "whether registration under AP Charities Act was a pre-requisite for registration or approval under the Income Tax Act" while the present case is not one of pre-requisite but a post registration alleged imperative. It is not a case of one arm of law being utilized to defeat another arm of law as no advantage is being taken under any other law of the fact that it is registered under Income Tax law. We find Hon'ble Supreme Court clearly spelt out that compliance under other laws can weigh in deciding approvals under section 10(23C). In view of the above discussion, we are of the considered opinion that the Ld. CIT(E) is not justified in cancelling the registration for not being registered under the Charity Commissioner under the BPT Act.