Commissioner Of Income Tax vs Red Rose School on 7 February, 2007
5. We have perused the case records, heard the rival
contentions and we find that in the detailed paper book filed by the
assessee, there is a detailed questionnaire raising various queries by
the office of the ld. Commissioner of Income-tax (Exemptions) and to
which assessee has given answers. The assessee therein has
categorically stated that the trust does not owe any immoveable asset.
Since the trust was formed on 21/4/2015, the first accounting year has
not yet ended. The statement of affairs as on date was enclosed and
[ITA No.190/LKW/2016] 3
no fund has been set apart since formation of the trust on 21/4/2015.
The assessee has also given the name of the trust with address, PAN,
Mobile number and the original documents of trust deed registered
with the Sub-Registrar, Gyanpur Bhadohi was also provided before the
Department. Now it is not disputed that it is a new trust and the
assessee had applied for its registration under section 12AA of the Act.
It is also not a case where Registration is sought for after a long
period of time after the trust was formed. We take guidance from the
judicial principles as enumerated in the decisions of Hon'ble Karnataka
High Court in the case of Director of Income Tax (Exemptions) vs.
Meenakshi Amma endowment Trust (supra) and Hon'ble Allahabad
High Court in the case of CIT vs. Red Rose School (supra) wherein it
has been held by the Hon'ble Courts that the ld. Commissioner of
Income-tax while considering the application for registration under
section 12AA of the Act will essentially look into the genuineness of the
activities of the trust or the institution and make enquiries in this
regard as necessary, but at that time the scope of 12AA does not seek
that the ld. Commissioner of Income-tax will also see whether the
income derived by the trust is spent for charitable purposes or whether
the trust is earning profit or not. So far as the case of the present
assessee is concerned, it was a new trust and all the details as sought
by the Department were duly submitted and even trust deed was filed
wherein the objects of the trust were clearly mentioned. When these
criteria are complied with, then registration under section 12AA ought
to have been granted to the assessee. We, taking guidance from the
aforesaid judicial principles, are of the considered view that in the
instant case registration under section 12AA of the Act should be
granted to the assessee once as per object clause the genuineness of
[ITA No.190/LKW/2016] 4
the activities of the trust is established. This fact is not disputed by
the ld. D.R. We, therefore, for the reasons stated hereinabove, direct
the ld. Commissioner of Income-tax (Exemptions) to grant registration
to the assessee trust under section 12AA of the Act.