Dismissing the appeal of the revenue the Court held that at stage of registration, question of application of income of trust is premature. DIT(E) rejected petitioner’s application for registration under S. 12A on ground that 29 per cent of its gross receipts were expended on making donations for religious purposes which was not in accordance with objects of trust. Court held that 71 per cent of receipt of trust were being spent in accordance with its object, it was established that trust was genuine. Court also held that spending a partial expenditure which was not authorized by trust would not make trust non-genuine and only consequences would be that benefit of S. 11 would not be available to that extent.
CIT v. Manekji Mota Charitable Trust. (2019) 267 Taxman 16 (Bom.)(HC) Editorial : SLP of revenue is dismissed , CIT v. Manekji Mota Charitable Trust ( 2020) 274 Taxman 378 (SC)
S. 12A : Registration–Trust or institution-71% of the receipt were spent in accordance with the object of the Trust-Partial expenditure were spent on religious-Trust is held to be genuine–Entitle for registration–Benefit of S.11 is not available only to the extent of partial expenditure which were spent on religious. [S. 11]