The Tax Publishers2020 TaxPub(DT) 1340 (SC) : (2020) 426 ITR 0340 : (2020) 313 CTR 0369 : (2020) 272 TAXMAN 0007

INCOME TAX ACT, 1961

Section 12AA

Where Trust had not spent any amount of its income for charitable purposes then this was a case of not carrying out the objects of the Trust and not carrying on activities contrary to its object. These circumstances may arise for many reasons including not finding suitable circumstances for carrying on activities. However, the matter relegated to wisdom of CIT(A) in view of section 12AA(3).

Charitable Trust - Registration under section 12AA - Activities of trust were contrary to its objects -

Assessee applied for registration under section 12AA which was rejected by Commissioner on the sole ground that since no activities have been undertaken by the trust, it was not possible to register it, presumably because it was not possible to be satisfied about whether the activities of the trust are genuine. High Court came to the conclusion that in case of a newly registered trust even though there was no activities, it was possible to consider whether the trust can be registered under section 12AA. Held: Trust had not spent any amount of its income for charitable purpose and that a Commissioner is entitled to refuse registration if the activities are found contrary to the objects of the Trust. It was found was that Trust had not spent any amount of its income for charitable purposes. This is a case of not carrying out the objects of the Trust and not carrying on activities contrary to its object. These circumstances might arise for many reasons including not finding suitable circumstances for carrying on activities. In these circumstances, appeal of assessee was dismissed.

Distinguished:Self Employers Service Society v. CIT (2001) 247 ITR 18 (Ker) : 2001 TaxPub(DT) 0608 (Ker-HC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :



IN THE SUPREME COURT OF INDIA

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT