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Commissioner Of Income Tax vs Red Rose School on 7 February, 2007

In "Red Rose School" (supra), considering the scope of inquiry by the CIT while granting registration u/s 12A of the Act, it has been held that Section 12AA of the Act confers power on the CIT while considering the application for registration of a Trust, to call for such documents or information from the Trust as he thinks necessary so as to satisfy himself about the genuineness of the activities of the Trust and also to make such inquiries as he may deem necessary in this behalf and after satisfying himself about the objects of the Trust and the genuineness of its activities, he shall pass an order in writing registering the Trust and if he is not so satisfied, he would refuse the registration; that Section 12AA of the Act does not speak anywhere that the CIT, while considering the application for registration, the CIT shall also see that the income derived by the trust is either not being spent for charitable purposes or the trust is earning profit; that profit earning or misuse of the income derived by the charitable institution from its charitable activities may be a ground for refusing exemption only with respect to that part of the income, but it cannot be taken to be a synonym to the genuineness of the activities of the trust; and that while considering the registration u/s 12AA, the scope of inquiry of the CIT would be limited to the aforesaid extent. In that case, the Tribunal was held to have rightly found that the objects of the assessee society showed that none of the objects was against public policy and the main activity of the society was, inter alia, to provide education to children. It was held that in case the institution had defaulted in depositing contributions of the Employees' Provident Fund, the Act concerned shall take care of such default, but in no case could it be a ground for refusal of registration.
Allahabad High Court Cites 13 - Cited by 122 - P Kant - Full Document

Dream Land Educational Trust vs Commissioner Of Income Tax on 5 April, 2007

17. "Dream Land Educational Trust" (supra) (authored by one of us - the JM) is also dealing with the scope of the inquiry by the CIT while considering grant of registration u/s 12A of the Act. Registration was ordered to be granted to the assessee in that case, where the objections of the CIT were held to be irrelevant for the purposes of grant of registration, the CIT refusing grant of registration on the ground that the dissolution deed of the firm vide which, property was settled on the trust, had not been registered, that no transfer deed was executed regarding the property transferred to the trust, that the take- over action was unilateral, that No Objection Certificate had not been obtained from the bankers and that on dissolution of the firm, it was left to the trustees to decide the fate of the net assets.
Income Tax Appellate Tribunal - Amritsar Cites 12 - Cited by 12 - Full Document
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