Court No. - 3 Case :- INCOME TAX APPEAL DEFECTIVE No. - 24 of 2016 Appellant :- Commissioner off Income Tax (Exemption) Respondent :- M/S Mahraja Agresen Smarak Trust 46/21 Kambal Wala Bagh Counsel for Appellant :- Alok Mathur Hon'ble Sudhir Agarwal,J. Hon'ble Ravindra Nath Mishra-II,J. 1. Heard Shri Alok Mathur, learned counsel appearing for appellant. 2. This appeal under Section 260A of Income Tact Act, 1961 (hereinafter referred to as "Act, 1961") has been preferred at instance of Revenue against judgment and order dated 31.08.2015 passed by Income Tax Appellate Tribunal, Lucknow "B", Lucknow in ATA No.215/LKW/2015 vide which Tribunal has directed Commissioner of Income Tax (Exemption) to grant registration under Section 12AA of Act, 1961. 3. Issue raised in this appeal is squarely covered by Division Bench judgment of this Court in Commissioner of Income Tax-II Vs. R.S. Bajaj Society, (2014) 222 TAXMAN 111. judgment reads as under: "1. appeal by revenue under Section 260A of Income-tax Act, 1961 arises from judgment of Income Tax Appellate Tribunal, Lucknow Bench dated 7 August 2013. assessee had challenged before Tribunal order of Commissioner of Income-tax-II, Lucknow dated 6 September 2012 declining to grant registration under Section 12AA of Income-tax Act, 1961. only ground on which CIT rejected application for registration was that though society was established in August 2011 with dominant object of imparting higher medical education by establishing Medical Colleges, Hospitals and Research Centres, such charitable activities had not still been commenced. provisions of Section 12AA have been construed in judgments of several High Courts which have been relied upon in judgment of Division Bench in Hardayal Charitable & Educational Trust v. CIT: [2013] 355 ITR 534/214 Taxman 655/32 taxmann.com 341 (All.). While following view which was taken by High Courts of Karnataka, Delhi and Punjab and Haryana, Division Bench has held as follows: preponderance of judicial opinion of all High Courts including this court is that at time of registration under section 12AA of Income-tax Act, which is necessary for claiming exemption under sections 11 and 12 of Act, Commissioner of Income-tax is not required to look into activities, where such activities have not or are in process of its initiation. Where trust, set up to achieve its objects of establishing educational institution, is in process of establishing such institutions, and receives donations, registration under section 12AA cannot be refused, on ground that trust has not yet commenced charitable or religious activity. Any enquiry of nature would amount to putting cart before horse. At this stage, only genuineness of objects has to be tested and not activities, which have not commenced. enquiry of Commissioner of Income-tax at such preliminary stage should be restricted to genuineness of objects and not activities unless such activities have commenced. trust or society cannot claim exemption, unless it is registered under section 12AA of Act and thus at that such initial stage test of genuineness of activity cannot be ground on which registration may be refused. 2. ITAT has held that in view of judgment of Division Bench of this Court in Hardayal Charitable & Educational Trust case (supra), order of rejection by Commissioner was contrary to law as laid down. Moreover, Commissioner did not raise any issue about objects of trust which Tribunal found are clearly charitable in nature. Thus, only ground which weighed with Commissioner in declining to grant registration has been found to be contrary to law. Tribunal has in circumstance while allowing appeal directed Commissioner to grant registration under Section 12AA. view of Tribunal is based on judgment of Division Bench of this Court which follows consistent body of law. 3. learned counsel appearing on behalf of revenue has also relied upon judgment of Kerala High Court in case of Self Employers Service Society v. CIT: [2001] 247 ITR 18/[2000] 113 Taxman 703. facts in that case are clearly distinguishable. proposal to start technical educational institution was made only after rejection of application by Commissioner. Moreover, it was held by Kerala High Court that society had not done any charitable work and its activities on contrary had been carried out only for purpose of generating incomes for its members. 4. Similarly, judgment of Punjab and Haryana High Court in Aman Shiv Mandir Trust v. C/r: [2008] 296 ITR 415/[2007] 162 Taxman 412 is also distinguishable because in that case, it was found that application filed by assessee was delayed by more than four years. Nothing had been spent during previous five years on any charitable purpose. Moreover, huge amounts of fixed deposits were found in name of trustee who had later approached Settlement Commission admitting his guilt. Hence, it is clear that both these judgments are on peculiar facts as slated hereinabove and are distinguishable. appeal would, therefore, not give rise to any substantial question of law and it is, accordingly, dismissed. There shall be no order as to costs." 4. No substantial question arises. 5. Appeal is, accordingly, dismissed. Order Date :- 2.8.2017 MVS Chauhan/- Commissioner of Income-tax (Exemption) v. Mahraja Agresen Smarak Trust