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COURT:
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DATE: March 25, 2021 (Date of pronouncement)
DATE: March 27, 2021 (Date of publication)
AY: 2018-19
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CITATION:
S. 11/ Form No.10B: Under Circular No.2 / 2020 dated 03.01.2020, the CBDT has delegated the power to the CIT to admit belated applications in filing Form No.10B for AY 2018-19 and onwards for a period of only upto 365 days. There is no error or infirmity in this stand. Fixing a period of one year’s delay i.e., 365 days of delay for condonation of delay in filing Form No.10B for AY 2018-19 and onwards cannot be said to be arbitrary or irrational. However, there is also nothing in s. 119(2)(b) preventing or precluding the CBDT from passing a special order in any given case from condoning the delay in filing Form No.10B beyond 365 days despite passing a general order. The Petitioner should approach the CBDT which will deal with the claim on merit and in accordance with law

We do not find any error or infirmity in the view taken by the CBDT vide Circular No.2 / 2020 or by the Commissioner while passing the impugned order dated 19.02.2020. Fixing a period of one year’s delay i.e., 365 days of delay for condonation of delay in filing Form No.10B for the assessment year 2018-19 and onwards cannot be said to be arbitrary or irrational. Therefore the general order passed by the CBDT in this regard under section 119(2)(b) cannot be faulted. However, there is also nothing in section 119(2)(b) preventing or precluding CBDT from passing a special order in any given case from condoning the delay in filing Form No.10B beyond 365 days despite passing a general order

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DATE: February 19, 2020 (Date of pronouncement)
DATE: March 7, 2020 (Date of publication)
AY: -
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CITATION:
S. 12AA: Registration can be applied for by a newly registered trust. There is no stipulation that the trust should have already been in existence and should have undertaken any activities before making the application for registration. The term ‘activities’ in s. 12AA includes ‘proposed activities’. The CIT must consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. However, he cannot refuse registration on the ground that no activities are carried out

Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term ‘activities’ in the provision includes ‘proposed activities’. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust.

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DATE: February 16, 2018 (Date of pronouncement)
DATE: February 17, 2018 (Date of publication)
AY: -
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CITATION:
S. 12A: The CIT has no power to cancel/withdraw/recall the registration certificate granted u/s 12A until express power to do so was granted by s. 12AA(3). Though the grant of certificate is a quasi judicial function, s. 21 of the General Clauses Act cannot be applied to support the order of cancellation of the registration certificate

The CIT had no express power of cancellation of the registration certificate once granted by him to the assessee under Section 12A till 01.10.2004. It is for the reasons that, first, there was no express provision in the Act vesting the CIT with the power to cancel the registration certificate granted under Section 12A of the Act. Second, the order passed under Section 12A by the CIT is a quasi judicial order and being quasi judicial in nature, it could be withdrawn/recalled by the CIT only when there was express power vested in him under the Act to do so. In this case there was no such express power

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DATE: December 14, 2017 (Date of pronouncement)
DATE: January 13, 2018 (Date of publication)
AY: -
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CITATION:
S. 12A: CIT is not justified in rejecting registration on the ground that the non-production of books and vouchers means that the genuineness of the charitable activities cannot be verified. The CIT is entitled only to examine the objects of the trust at the stage of registration and not the books of account

While dealing with the application for registration the CIT has to examine whether the application is made in accordance with s. 12A r/w r. 17A and whether Form No.10A has been properly filled up. He may also examine whether objects of the trust are charitable or not. Sec. 12AA nowhere provides that CIT while considering the application for registration is also required to examine whether the income derived by the trust is being spent for charitable purposes or the trust is earning profit. The language employed by the legislature in s. 12AA only requires that activities of the trust or institution must be genuine which should be in consonance with the object of the trust. At this stage, the CIT is not required to examine the application of income

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DATE: April 18, 2017 (Date of pronouncement)
DATE: April 28, 2017 (Date of publication)
AY: 2009-10
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CITATION:
S. 2(15)/12AA: The activities of Banquet Hall Hiring, Hospitality (Restaurants) and Permit Room (Bar) are prima facie in the nature of carrying on trade, commerce, or business for consideration and are hit by the proviso to s. 2(15). If the receipts from these activities are in excess of the minimum prescribed threshold limit, the DIT is required to conduct detailed enquiry and examination as to the nexus between the activities and trade, commerce or business

In the light of the above observation and respectfully following the same, we are prima facie of the opinion that the activities of the assessee of Banquet Hall Hiring, Hospitality (Restaurants) and Permit Room (Bar) are in the nature of carrying on trade, commerce, or business for consideration, which are hit by proviso to Section 2(15) of 1961 Act. We further observe that the receipts from these activities, during the previous year relevant to the impugned assessment year 2009-10, are far in excess of minimum prescribed threshold limit. This requires detailed enquiry and examination by the Ld. DIT(Exemption) as to the various activities undertaken by the assessee over a period of time and its nexus with activity of rendering of trade commerce or business as contemplated and mandated by amended Section 2(15) of 1961 Act read in conjunction with significant observations made in the above order dated 14-2-2017 in North Indian Association(supra). Thus, enquiry and examination by learned DIT(E) is further required to arrive at a conclusion whether activities of the assessee are genuine or not in context of Section 11 of the Act read with amended Section 2(15) of the Act and breach of threshold limit over a period of time

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DATE: December 23, 2016 (Date of pronouncement)
DATE: December 29, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 2(15)/11: Impact of the amendment to the definition of "charitable purpose" in s. 2(15) by insertion of a proviso by the Finance Act, 2008 and whether it supersedes the verdicts in Loka Shikshana Trust 101 ITR 234 (SC), Surat Art Silk Cloth Mfrs. Association 121 ITR 1 (SC) etc explained

If the legislature intended the latter part of the proviso to apply to the word “advancement” as well and not merely to the words “object of general public utility”, it would have worded the amendment entirely differently. The proviso would have expressly been made applicable to the advancement as well as to the object of general public utility. That the legislature did not do so is an indication that it accepted the interpretation of the Supreme Court of Section 2(15) as it originally stood and retained the effect of the section in that regard in the 2009 amendment. The ratio of the judgment in Surat Art Silk’s case (supra), in this regard, therefore, remains the same

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DATE: April 13, 2016 (Date of pronouncement)
DATE: April 19, 2016 (Date of publication)
AY: -
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CITATION:
S. 2(15)/ 11: If the predominant purpose is charitable, the earning of profit from an incidental activity like letting of property does not affect the charitable status. As the letting is a part of the educational activities, there is no obligation to maintain separate books u/s 11(4A). As per CBDT Circular No. 11 of 2008, the first proviso to s. 2(15) applies to the 'advancement of any other object of general public utility'

The revenue’s contention that the tribunal has overlooked the provisions of section 11(4A) is unfounded. We have noted above that the service charges received in respect of 6th and 7th floor were clearly on account of educational purpose. Letting out was incidental and not the principle activity of the assessee trust. Thus, in our opinion, section 11(4A) which require separate account to be maintained would not be attracted in view of our conclusion that the said amounts as received by the assessee for the assessment year have been received from educational activity which is the dominant activity of the assessee trust. In our opinion, if this be the case, separate books of accounts cannot be insisted upon as the said activity becomes part and parcel of the educational activities carried out by the assessee trust. In such a case, the benefit of exemption under section 11 (4A) cannot be denied. An interpretation as urged on behalf of the revenue would render nugatory the very spirit, rationale and the object of the exemption provisions making the same unworkable

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