Commissioner of Incometax v. Kutchi Dasa Oswal Moto Pariwar Ambama Trust

Case Laws Analysis
Relied on Maha Avatar Trust v. ITO 2014 TaxPub(DT) 2356 (Chen-Trib)
Followed on Director of Income-Tax Exemptions v. Seervi Samaj Tambaram Trust 2014 TaxPub(DT) 1817 (Mad-HC)

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The Tax PublishersTax Appeal No. 918 of 2011 2013 TaxPub(DT) 0534 (Guj-HC) : (2014) 362 ITR 0194 : (2014) 271 CTR 0595 : (2013) 212 TAXMAN 0435 : (2013) 089 DTR 0293 INCOME TAX ACT, 1961 --Charitable trust--Registration under section 12AAPower of CIT to reject application on failure of trust to Convince him about genuineness of activities--Assessee had made an application for registration under section 12A(i)(a). Commissioner however, rejected such application for registration noted that from the trust deed that the objectives of the trust were mainly religious therefore, he had issued a letter to the trust calling upon the trust to produce evidence regarding expenses incurred towards the objects of the organization and on activities carried out since its inception. On failure of assessee-trust to bring on record any such documentary evidence, Commissioner rejected the application as the genuineness of the activities of the assessee-trust could not be established. *Held:* Was not justified. Under section 12AA, the Commissioner has to satisfy himself about the objectives of the trust and the genuineness of its activities. He has the power to call for such documents or information from the trust as, he thinks are necessary. However, this does not mean that if the activities of the trust have not commenced, the Commissioner has authority to reject its application for registration on the ground that the trust failed to convince him about the genuineness of the activities. Moreso, merely on the ground that the activities of the trust had not commenced, Commissioner was persuaded to reject application for registration, which was not appropriate. Income Tax Act, 1961 Section 12AA In the Gujarat High Court Akil Kureshi & Sonia Go Kan JJ. CIT v. Kutchi Dasa Oswal Moto Pariwar Ambama Trust Tax Appeal No. 918 of 2011 10 December 2012 Appellant by : Pranav G. Desai ORDER *Akil Kureshi, J.* Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Rajkot Bench ('Tribunal' for short) raising following question for our consideration : 'Whether the Appellate Tribunal is right in law and on facts in directing to allow assessees application for registration under section. 12A of the Act ?' 2. Brief facts stated are as under : 2.1 The respondent-assessee had made an application for registration under section 12A(l)(a) of the Income Tax Act, 1961 ('Act' for short) in prescribed form. The Commissioner, however, by his order dated 29-9-2010 rejected such application for registration. In his said order, he noted that from the Trust Deed, it emerges that the objectives of the Trust are mainly religious. The Commissioner had issued a letter to the Trust calling upon the Trust to produce evidence regarding expenses incurred towards the objects of the organization and on activities carried out since its inception. In response to such letter, it was submitted on behalf of the Trust that there were no activities till 31-3- 2010 as very limited time was left to carry out any activity during the year ending on 31-3-2010 and the actual activities will start during Navratri of the current year. The Commissioner, however, rejected the application observing as under : SUBSCRIBE FOR FULL CONTENT

The Tax PublishersTax Appeal No. 918 of 2011
2013 TaxPub(DT) 0534 (Guj-HC) : (2014) 362 ITR 0194 : (2014) 271 CTR 0595 : (2013) 212 TAXMAN 0435 : (2013) 089 DTR 0293

INCOME TAX ACT, 1961

--Charitable trust--Registration under section 12AAPower of CIT to reject application on failure of trust to Convince him about genuineness of activities--Assessee had made an application for registration under section 12A(i)(a). Commissioner however, rejected such application for registration noted that from the trust deed that the objectives of the trust were mainly religious therefore, he had issued a letter to the trust calling upon the trust to produce evidence regarding expenses incurred towards the objects of the organization and on activities carried out since its inception. On failure of assessee-trust to bring on record any such documentary evidence, Commissioner rejected the application as the genuineness of the activities of the assessee-trust could not be established. Held: Was not justified. Under section 12AA, the Commissioner has to satisfy himself about the objectives of the trust and the genuineness of its activities. He has the power to call for such documents or information from the trust as, he thinks are necessary. However, this does not mean that if the activities of the trust have not commenced, the Commissioner has authority to reject its application for registration on the ground that the trust failed to convince him about the genuineness of the activities. Moreso, merely on the ground that the activities of the trust had not commenced, Commissioner was persuaded to reject application for registration, which was not appropriate.

Income Tax Act, 1961 Section 12AA

In the Gujarat High Court

Akil Kureshi & Sonia Go Kan JJ.

CIT v. Kutchi Dasa Oswal Moto Pariwar Ambama Trust

Tax Appeal No. 918 of 2011

10 December 2012

Appellant by : Pranav G. Desai

ORDER

Akil Kureshi, J.

Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Rajkot Bench ('Tribunal' for short) raising following question for our consideration :

'Whether the Appellate Tribunal is right in law and on facts in directing to allow assessees application for registration under section. 12A of the Act ?'

2. Brief facts stated are as under :

2.1 The respondent-assessee had made an application for registration under section 12A(l)(a) of the Income Tax Act, 1961 ('Act' for short) in prescribed form. The Commissioner, however, by his order dated 29-9-2010 rejected such application for registration. In his said order, he noted that from the Trust Deed, it emerges that the objectives of the Trust are mainly religious. The Commissioner had issued a letter to the Trust calling upon the Trust to produce evidence regarding expenses incurred towards the objects of the organization and on activities carried out since its inception. In response to such letter, it was submitted on behalf of the Trust that there were no activities till 31-3- 2010 as very limited time was left to carry out any activity during the year ending on 31-3-2010 and the actual activities will start during Navratri of the current year. The Commissioner, however, rejected the application observing as under :