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| The Tax Publishers2020 TaxPub(DT) 5424 (Ctk-Trib) INCOME TAX ACT, 1961
Section 12AA
Where assessee-trust was collecting fees from different organizations towards training programmes and it also received rent for letting out its part premises; the CIT was justified in rejecting the assessee's application for grant of registration under section 12AA on the ground that the activities of the trust were not charitable, but were commercial in nature.
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Charitable trust - Registration under section 12AA - Denial - Trust was collecting fees from different organizations towards training programmes---Activities of trust being not charitable but commercial in nature
Assessee-trust filed an application for seeking registration under section 12AA. CIT rejected such application alleging that the activities of the trust were not charitable but were commercial in nature and that the activities of the trust were not in accordance with the objects mentioned in the trust deed. Assessee submitted that CIT did not afford reasonable opportunity of hearing to it before rejecting the application for grant of registration under section 12AA. It was also submitted that the CIT was not justified in observing that the activities of the trust were not charitable in nature as it was engaged in imparting training programmes as per syllabus prescribed by Government for Electrical, Mechanical and Instrumentation Branches for engineers, supervisors and technicians sponsored by various companies/organizations. Held: Assessee filed application for registration under section 12AA. Thereafter, the CIT issued notices to the assessee to produce its original memorandum of association/trust deed for verification, in response to which, the assessee also filed reply. Later on also the case was posted for hearing and the assessee also attended the hearing and the matter was discussed. Therefore, it could not be inferred that the assessee was not provided proper opportunity of hearing. Further, the assessee had been conducting various training programmes for engineers, supervisors and technicians of various companies and for such work; the assessee was charging certain amount from the companies. Thus, the said activity was nothing but a contract and there was no charitable element involved in the same. Also, the assessee trust received rent from renting the part premises. Hence, the CIT was justified in rejecting the assessee's application for grant of registration under section 12AA.
REFERRED :
FAVOUR : Against the assessee.
A.Y. :
IN THE ITAT, CUTTACK BENCH
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