THE COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL v. SEWA DRISHTI SAMITI
[Citation -2015-LL-0921-23]

Citation 2015-LL-0921-23
Appellant Name THE COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL
Respondent Name SEWA DRISHTI SAMITI
Court HIGH COURT OF MADHYA PRADESH
Relevant Act Income-tax
Date of Order 21/09/2015
Judgment View Judgment
Keyword Tags grant of registration to trust • activities and transaction of trust
Bot Summary: 12A of the Act prescribes conditionsfor registration of the trust whereas s.12AA of theAct prescribes the procedure for registration. Acareful reading of the relevant provisions wouldreveal that application for registration under s.12A has to be made in Form No.10A prescribedby r.17A before the expiry of one year from thedate of creation of the trust or establishment ofthe institution whichever is later. The applicationhas to be made by a person in receipt of income ofthe trust. Sec.12AA nowhere provides that CIT whileconsidering the application for registration is alsorequired to examine whether the income derivedby the trust is being spent for charitablepurposes or the trust is earning profit. Our view finds support from the Division Bench decision of the Allahabad High Court rendered in the case of Red Rose School and the decisions in the cases of New Life in Christ Evangelistic Association, Fifth Generation Education Society and Shantagauri Ramniklal Trust. If the assessment made and the reasons given by thelearned competent authority in the order passedrejecting the application under section 12AA(1) of theIncome Tax Act, is perused, we find that the applicationhas been rejected on merits after considering varioustransactions and activities of the Trust in question andnot based on the activities of the Trust. The Tribunal has not committed any errorin applying the law laid down in the case of DPRCharitable Trust.


ITA-65-2015
(THE COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL Vs SEWA DRISHTI SAMITI)


21-09-2015

Shri Sanjay Lal for appellant.
This is revenues appeal under section 260-A of the
Income Tax Act, 1961 calling in question tenability of the
order-dated 24.4.2015, passed by Income Tax
Appellate Tribunal, Jabalpur in ITA No.111/Jab/2013.
Respondent/applicant filed application under section
12AA, of Income Tax Act, and by going into various
financial aspects of matter and after going through
the cash book and other particulars with regard to
payment made by assessee, application under
section 12AA was rejected. On appeal being filed by
the assessee, learned Tribunal took note of law
laid down by Division Bench of this Court in case of
Commissioner of Income Tax Vs. DPR Charitable
Trust, (2011) 61 DTR 410, and held that on the
grounds indicated as application could not be
rejected, directed for grant of registration under section
12A.
Even though Shri Sanjay Lal, learned counsel for the
appellant, tried to indicate that law laid down in the
case of DPR Charitable Trust (supra) will not apply in
the facts and circumstances of present case. We find
that coordinate Division Bench of this Court, in the
case of DPR Charitable Trust (supra), in paragraph 8
has dealt with matter in following manner:-
8. Sec. 12A of Act prescribes conditions
for registration of trust whereas s.12AA of the
Act prescribes procedure for registration. A
careful reading of relevant provisions would
reveal that application for registration under s.
12A has to be made in Form No.10A prescribed
by r.17A before expiry of one year from the
date of creation of trust or establishment of
the institution whichever is later. application
has to be made by person in receipt of income of
the trust. Thus while dealing with application
for registration 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 trust are charitable or not. Sec.
12AA nowhere provides that CIT while
considering application for registration is also
required to examine whether income derived
by trust is being spent for charitable
purposes or trust is earning profit. The
language employed by legislature in s. 12AA
only requires that activities of trust or
institution must be genuine which should be in
consonance with object of trust. At this
stage, CIT is not required to examine the
application of income. All that he may examine is
whether application is made in accordance
with requirements of s. 12A r/w r. 17A and
whether Form No.10A has been properly filled up.
He has also to see whether objects of trust
are charitable or not. Our view finds support from
Division Bench decision of Allahabad High
Court rendered in case of Red Rose School
(supra) and decisions in cases of New Life
in Christ Evangelistic Association (supra), Fifth
Generation Education Society (supra) and
Shantagauri Ramniklal Trust (supra).


If assessment made and reasons given by the
learned competent authority in order passed
rejecting application under section 12AA(1) of the
Income Tax Act, is perused, we find that application
has been rejected on merits after considering various
transactions and activities of Trust in question and
not based on activities of Trust.
That being so, Tribunal has not committed any error
in applying law laid down in case of DPR
Charitable Trust (supra). No substantial question of law
arises for consideration in this appeal.
Accordingly, appeal stands dismissed.

(RAJENDRA MENON) (C V SIRPURKAR)
JUDGE JUDGE
COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL v. SEWA DRISHTI SAMITI
Report Error