|CORAM:||G. S. Pannu (AM), Sushma Chowla (JM)|
|SECTION(S):||11, 12AA, 13|
|CATCH WORDS:||Charitable purpose, registration|
|COUNSEL:||V. L. Jain|
|DATE:||January 30, 2015 (Date of pronouncement)|
|DATE:||February 9, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 12AA/80G(5): CIT, while granting registration or renewal, can only look at the nature of activities and is not concerned with potential violation of s. 11(5) or s. 13. Registration cannot be denied on ground that activities have not commenced|
(i) At the time of grant of registration, the powers of the CIT enshrined under section 12AA of the Act, provided that the CIT is to look into the objects of the Trust and the genuineness of its activities. Merely because, one of the objects of the Trust was for the benefit of upliftment of the Jain community as against the pre-dominant object of providing education by the Trust or the Institution, the issue arises whether the grant of registration under section 12AA of the Act could be denied to the assessee. We find no merit in the order of CIT in observing that the said benefit being provided to the Jain community would attract the provisions of section 13(1)(b) of the Act and the assessee therein would not be entitled to the claim of deduction under sections 11 and 12 of the Act and consequently, there was no merit in allowing the registration under section 12A of the Act. The allowability of the deduction under sections 11 and 12 of the Act is to be looked into by the Assessing Officer while completing the assessment in the hands of the assessee at the relevant time. Whether the said deduction under sections 11 and 12 of the Act is allowable or not to the Trust or the Institution by way of non-fulfillment of the conditions laid down in section 13(1)(b) of the Act is to be considered by the Assessing Officer while completing assessment in the hands of the assessee Trust or Institution. But the said violation by the Trust or Institution on account of provisions of section 13(1)(b) of the Act, if any, are not to be considered by the CIT while granting registration under section 12A of the Act.
(ii) The second aspect of the issue raised by the CIT was that where the assessee had not started its activities, then it was not entitled to the claim of registration under section 12A of the Act. The assessee in the present facts and circumstances of the case, had in its objects recognized the field of education as the activity to be carried on. Merely because that the said activity has not started, does not dis-entitle the assessee from the claim of registration under section 12A of the Act.