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| The Tax Publishers2019 TaxPub(DT) 6639 (Bom-HC) : (2019) 267 TAXMAN 0016 INCOME TAX ACT, 1961
Section 12AA
At stage of registration, question of application of income of trust is premature, where undisputedly 71% of receipt of trust were spent in accordance with its object, merely a partial expenditure, which was for religious purposes was not to make trust non-genuine.
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Charitable trust - Cancellation of registration under section 12AA - Charitable or religious trust -
Director (Exemption) rejected assessee's application for registration under section 12A on ground that 29% of its gross receipts were expended on making donations for religious purposes which was not in accordance with objects of trust. Held: Tribunal in its order noted the fact that at the time of registration of the Trust, question of application of income of the Trust was premature. Undisputedly 71% of the receipts of Trust were being spent in accordance with its objects. Therefore, this itself would establish that Trust was in existence. A partial expenditure which was not authorized by the Trust would not itself lead to the Trust becoming non-genuine. The consequence would be that benefit of section 11 would not be available to that extent. Thus, appeal of Revenue was dismissed.
REFERRED : CIT (Exemption) v. Geeta Lalwani Foundation [IT Appeal No. 91 of 2016, dt. 3-7-2018]
FAVOUR : In assessee's favour
A.Y. :
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