Indian Kanoon - Search engine for Indian Law

c) CIT vs Vijay Vargiya Vani Charitable Trust (2014) 271 CTR 0698 (Raj) and Fifth Generation Education vs CIT (1990) 185 1TR 634 (All), it is held that at the stage of Section 12A, the Commissioner 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 No. IOA has been properly filled up. He may also see whether the objects of the trust are charitable or not. At this State, it is not proper to examine the application of income.

12. Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the 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 found to have undertaken activities contrary to the objects of the Trust.

10. We have heard the rival contentions, perused the material available on records and case laws relied upon. In view of the aforesaid decision in the case of Ananda (supra), since the actual activities of the trust cannot be the deciding factor while granting the registration u/s 12A but the object of the trust should have been looked into, the activities have to be looked into by the Assessing ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society Officer at the time of assessment proceedings. It is also a fact that the trust was formed with charitable objects eligible for approval u/s.12AA of the Act, which is substantiated by the department itself by granting registration u/s 12AA on 25-3-2021 vide order ITBA/EXM/S/12AA/2020-21/1031751676(1). In such circumstances, respectfully following the judgment in the case of Ananda (supra), we are of the considered opinion that the rejection of application for registration u/s 12AA of the Act by Ld CIT(E) was an erroneous application of law, thus, cannot sustain, accordingly we quash the same and direct to grant registration to the assessee as per law.