Kul Foundation, Pune V. CIT-I, Pune

ITA 1692/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88855 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-12-2014
• Assessment Year: misc
• Appeal Filed On: 05-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Assessee Lawyers: V L JAIN
• Keywords: Charitable institution; Question of law
• Section: 260A; 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1692/PN/2013 (ORDER UNDER SECTION 12AA) KUL FOUNDATION, BUNGALOW NO.2, LA ENVIRO CTS NO.588, NEAR HUTCHING SCHOOL, PUNE 411001 . APPELLANT PAN: AACTK0652N VS. COMMISSIONER OF INCOME TAX-I, PUNE . RESPONDENT APPELLANT BY : SHRI V.L. JAIN RESPONDENT BY : SMT. M.S. VERMA, CIT DATE OF HEARING : 24-12-2014 DATE OF PRONOUNCEMENT : 30-01-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT-I, PUNE DATED 29.07.2013 PASSED UNDER SECTION 12AA(1)(B)(II) OF THE INCOME-TAX ACT, 1961 READ WITH RULE 17A OF THE INCOME T AX RULES, 1962. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS IN NOT GRANTING AN APPROPRIATE OPPORTUNITY OF HEARING AND H AS THUS VIOLATED THE LAWS OF NATURE JUSTICE. 2. THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS IN DENYING THE REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 19 61 FOR THE TWIN REASONS THAT (I) CLAUSE NO.23 OF THE OBJE CT CLAUSES OF THE TRUST DEED IS SPECIFICALLY FOR THE BE NEFIT OF THE JAIN COMMUNITY, WHICH IS A SPECIFIC RELIGIOUS COMMUNITY AND WHICH ATTRACTS THE PROVISIONS OF SEC.13(1 )(B) AND (II) THE TRUST HAS NOT COMMENCED ITS ACTIVITIES AS YE T. ITA NO.1692/PN/2013 KUL FOUNDATION 2 3. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL OR ADD TO THE SAME, IF DEEMED NECESSARY. 3. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS NO T PRESSED. HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 4. THE ISSUE RAISED VIDE GROUND OF APPEAL NO.2 IS AGAINST T HE DENIAL OF REGISTRATION UNDER SECTION 12A OF THE ACT FOR THE REAS ON THAT CLAUSE NO.23 OF THE OBJECT CLAUSE OF THE TRUST DEED WAS SPECIFICA LLY FOR THE BENEFIT OF JAIN COMMUNITY AND FURTHER, THE TRUST HAD NOT COMMENCED ITS ACTIVITIES AS YET. 5. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT, THE ASS ESSEE FILED AN APPLICATION IN FORM NO.10A FOR GRANT OF REGISTRATION UND ER SECTION 12A OF THE ACT. THE ASSESSEE TRUST WAS SET UP BY TRU ST DEED DATED 03.09.2012. THE ASSESSEE WAS CALLED UPON TO FURNISH THE I NFORMATION REGARDING THE CHARITABLE ACTIVITIES CARRIED ON BY THE TRUS T ALONG WITH EVIDENCE. IN REPLY, THE ASSESSEE MENTIONED ABOUT ITS PR OPOSED ACTIVITIES AND DID NOT SAY ANYTHING ABOUT THE ACTIVITIES AC TUALLY CARRIED OUT SO FAR. THE CIT FURTHER NOTED THAT EVEN THOUGH TH E OBJECTS OF THE APPLICANT TRUST WERE BY AND LARGE CHARITABLE, TWO OBJECTS VIDE SERIAL NOS.22 AND 23 APPEARING IN THE OBJECT CLAUSE IN THE TRUS T DEED, WERE FOR THE BENEFIT OF JAIN COMMUNITY. THE ASSESSEE WAS SHOW CAUSED AS TO WHY THE APPLICATION FOR THE REGISTRATION UNDER SECTION 12A OF THE ACT SHOULD NOT BE REJECTED IN VIEW OF THE TWO ITEMS OF THE OB JECT CLAUSE ATTRACTING THE PROVISIONS OF SECTION 13(1)(B) OF THE ACT. IN REPLY, THE ASSESSEE EXPLAINED THAT THE ACTIVITIES AS PER SERIAL NO.22 OF THE OBJECT CLAUSE, DOES NOT CONFER ANY BENEFIT ON ANY PARTICULAR COMM UNITY AND HENCE, WOULD NOT ATTRACT THE PROVISIONS OF SECTION 13(1)(B) O F THE ACT. IN RESPECT OF THE SECOND OBJECT CLAUSE I.E. SERIAL NO.23, T HE ASSESSEE EXPLAINED THAT THE OBJECT WAS NOT FOR THE PROMOTION OF A NY ONE RELIGION, ITA NO.1692/PN/2013 KUL FOUNDATION 3 BUT WAS FOR THE PROMOTION OF EDUCATIONAL AND SOCIAL STANDA RDS OF THE JAIN COMMUNITY. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY HONBLE MADRAS HIGH COURT IN CIT VS. SHRI GUJRATHI MANDA L (1999) 240 ITR 293 (MAD) AND THE HONBLE SUPREME COURT IN STAT E OF KERALA VS. M.P. SHANTI VERMA JAIN (1981) 231 ITR 787 (SC) WHEREIN, IT WAS LAID DOWN THAT SECTION 13(1)(B) OF THE ACT IS APPLICABLE ONLY WHEN THE DOMINANT OBJECT OF THE TRUST WAS PROPAGATION OF A PARTIC ULAR RELIGION AND SERVING ITS FOLLOWERS. THE ASSESSEE, WITHOUT PREJUDICE TO THE ABOVE CONTENTION, SUBMITTED THAT IF IT WAS DESIRABLE, THE CLAUSES COULD BE MODIFIED SUBJECT TO THE POWERS CONFERRED IN THE TRUST DE ED. WITH REGARD TO THE ACTIVITIES NOT HAVING BEEN COMMENCED, THE CONTENTION OF THE ASSESSEE WAS THAT AN APPLICATION FOR REGISTRATION UNDER SECT ION 12A OF THE ACT COULD NOT BE REJECTED MERELY ON THIS GROUND . RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIG H COURT IN CIT VS. KUTCHI DASA OSWAL MOTO PARIVAR AMBAMA TRUST (2013) 29 TAXMANN.COM (GUJ). 6. THE CIT NOTED THAT THOUGH OTHER OBJECTS IN THE TR UST DEED WERE GENERAL IN NATURE, HOWEVER, THE OBJECT IN PARTICULAR IN ITEM NO.23 COULD NOT BE SAID TO BE GENERAL IN NATURE SINCE IT WAS ME ANT SPECIFICALLY FOR THE BENEFIT OF JAIN COMMUNITY. THE CIT DISTING UISHED THE CASE LAWS RELIED UPON BY THE ASSESSEE AND POINTED O UT THAT THE FACTS OF THE CASE IN HAND ARE DIFFERENT FROM THE JUDICIAL PRO POSITIONS LAID DOWN BY THE VARIOUS COURTS. THE CIT VIDE PARA 3.1.2 OBSERVED AS UNDER:- 3.1.2 FOR THE REASONS STATED SUPRA IT HAS TO BE HELD THAT THE APPELLANT BEING A CHARITABLE TRUST AND YET AS BY VIRTU E OF ITEM (23) OF THE OBJECT CLAUSES IT SPECIFICALLY INTEND TO BENE FIT A SPECIFIC RELIGIOUS COMMUNITY, THE PROVISIONS OF SECTION 13(1)(B ) ARE CLEARLY ATTRACTED. AS PER SECTION 13(1)(B), THE BENEFIT OF SE CTIONS 11 & 12 CANNOT BE EXTENDED TO A CHARITABLE TRUST OR INSTITUTIO N WHICH HAS BEEN ESTABLISHED FOR THE BENEFIT OF ANY SPECIFIC RE LIGIOUS COMMUNITY OR CASE. WHEN THE BENEFIT OF SECTIONS 11 & 12 CANNOT ITA NO.1692/PN/2013 KUL FOUNDATION 4 THUS BE EXTENDED TO THE APPLICANT TRUST IN VIEW OF T HE ITEM (22) OF THE OBJECT CLAUSES, NO PURPOSE WOULD BE SERVED BY GR ANTING IT REGISTRATION U/S.12A WHICH IS AN IN-PRINCIPLE RECOGNIT ION OF ENTITLEMENT OF SUCH BENEFITS. 7. FURTHER VIDE PARA 3.2, THE CIT NOTED THAT THE APPLICA NT TRUST HAD NOT CARRIED OUT ANY ACTIVITIES SO FAR AND THE ASSES SEE HAD NOT DENIED THE SAME. THE CIT WAS OF THE VIEW THAT WHEN NO ACTIVITIES WERE THERE, SATISFACTION REGARDING THE GENUINENESS OF THE ACTIVIT IES COULD NOT BE FOUND AND THIS ISSUE WAS ALSO DECIDED AGAINST THE ASS ESSEE. THE CIT HELD THAT THE ASSESSEE WAS NOT ENTITLED TO REGISTRA TION UNDER SECTION 12A OF THE ACT AS IT WAS ADVERSELY HIT BY THE P ROVISIONS OF SECTION 13(1)(B) OF THE ACT. THUS, THE ASSESSEES REQUEST FOR GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT, WAS NOT ACCEPTED. 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT. 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT THE MAIN OBJECT OF THE ASSESSEE TRUST WAS IN THE FIELD OF EDUCATION AND THOUGH THE ASSESSEE HAD NOT STARTED ITS ACTIVITIES AS PER THE OBJECTS OF THE TRUST, BUT WAS ENTITLED TO THE CLAIM OF REGISTRATION UNDER SECTION 12A OF THE ACT. IT WAS FURTHER POINTED OUT BY THE LEAR NED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE OB JECT AT SERIAL NO.23 WAS NOT VIOLATIVE OF THE PROVISIONS OF SECTION 13(1)(B) OF THE ACT. RELIANCE IN THIS REGARD, WAS PLACED UPON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. DAWOODI BOHARA JAMAT 222 TAXMAN 228 (SC). IT WAS FURTHER POINTED OUT BY THE LEARNED AUT HORIZED REPRESENTATIVE FOR THE ASSESSEE THAT AT THE TIME OF GRA NT OF REGISTRATION UNDER SECTION 12A OF THE ACT, THE APPLICABILITY OF THE PROVIS IONS OF SECTION 13(1)(B) OF THE ACT IS NOT TO BE LOOKED INTO. IN THIS REGARD, THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF THE TRIBUNAL IN SADGURU NARENDRA MAHARAJ SANSTHAN VS. CIT-I I, IN ITA ITA NO.1692/PN/2013 KUL FOUNDATION 5 NO.994/PN/2012, VIDE ORDER DATED 16.09.2014. FURTHER, REL IANCE WAS PLACED ON THE RATIOS LAID DOWN BY THE HONBLE HIGH COURT OF ALLAHABAD IN HARDAYAL CHARITABLE & EDUCATIONAL TRUST VS. CIT-II, (201 3) 355 ITR 534 (ALL) AND HONBLE HIGH COURT OF GUJARAT IN DIRECTOR OF IN COME TAX (EXEMPTION) VS. PANNA LALBHAI FOUNDATION, (2013) 216 TAXMAN 1 48 (GUJ). 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE PLACING RELIANCE ON THE ORDER OF CIT, POINTED OUT THAT TH E PROVISIONS OF SECTION 13(1)(B) OF THE ACT COULD BE CONSIDERED WHILE ALLOWING REGISTRATION UNDER SECTION 12A OF THE ACT. RELIANCE IN THIS REGARD, WAS PLACED ON THE RATIOS LAID DOWN BY HONBLE HIGH COURT OF MA DHYA PRADESH (INDORE BENCH) IN SHRI DHAKAD SAMAJ DHARAMSHALA BHAW AN TRUST VS. CIT (2008) 302 ITR 321 (MP) AND IN CIT, UJJAIN VS. DAWOODI BOHATA JAMAT (2009) 184 TAXMAN 222 (MP). 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO T HE CLAIM OF REGISTRATION UNDER SECTION 12A OF THE ACT FOR CARRYING ON CHARITAB LE AND RELIGIOUS ACTIVITIES. THE ASSESSEE TRUST WAS FORMED BY A T RUST DEED DATED 03.09.2012. THE COPY OF THE TRUST DEED IS PLACED A T PAGES 1 TO 20 OF THE PAPER BOOK. THE SAID TRUST WAS REGISTERED UN DER THE BOMBAY PUBLIC TRUST ACT, 1950 VIDE NOTIFICATION DATED 08.10.2 012 ISSUED BY THE ASSISTANT CHARITY COMMISSIONER, PUNE REGION , PUNE. THE ACTIVITIES OF THE TRUST AS PER OBJECT CLAUSE NO.1 WAS TO START PRE- PRIMARY, PRIMARY, SECONDARY, HIGHER SECONDARY INCLUDING GRAD UATION, POST-GRADUATION INSTITUTIONS, RESEARCH CENTRE, ETC. THE AIM AND OBJECT OF THE ASSESSEE TRUST WAS TO ESTABLISH AND STAR T EDUCATIONAL INSTITUTIONS FOR IMPARTING SCHOOL AND COLLEGE EDUCATION, FOR PR OVIDING ACADEMIC, TECHNICAL, ENGINEERING, VOCATIONAL, SPORTS, PROFESSIONA L AND ITA NO.1692/PN/2013 KUL FOUNDATION 6 SOCIAL EDUCATION. FURTHER, EDUCATIONAL INSTITUTIONS HAD TO START IN THE FIELD OF BUSINESS / MANAGEMENT STUDIES, ENGINEERING, ETC. THE SE WERE THE OBJECTS OF THE TRUST AS PER CLAUSES 2 AND 3 OF TH E TRUST DEED. THE ASSESSEE HAD FURTHER ENLISTED SEVERAL OTHER OBJECTS IN LIN E WITH THE FIELD OF EDUCATION, VIDE CLAUSES NOS.22 AND 23, WHICH READ AS UNDER:- 22. TO INCULCINATE SPIRITUALITY AND JAIN PHILOSOPHY O F NIRVANA AND KARMA AND SUCH PARALLEL PHILOSOPHIES PROFESSING AHIN SA AND NIRVANA THROUGH SELF-PURIFICATION AND SCIENTIFIC MET HODS OF LIVING WITHOUT BELIEF IN TANTRA, MANTRA, MAGIC AND SUPPORT OF ANY IMPURE MEANS. 23. THE SOCIETY SHALL PROTECT THE INTEREST OF JAIN CO MMUNITY AS A MINORITY COMMUNITY AND FOR THAT PURPOSE THE OBJECTS ARE AS UNDER:- 1. TO OBTAIN STATUS OF MINORITY OF JAIN COMMUNITY. 2. TO PROVIDE EDUCATIONAL FACILITIES FOR JAIN COMMUNITY STUDENTS. 3. TO GUIDE FOR FINANCIAL ASSISTANCE TO THE POOR DESERVI NG AND NEEDY STUDENTS FROM JAIN COMMUNITY. 4. TO GIVE ADMISSION TO JAIN STUDENTS IN THE SCHOOL AS PER THEIR QUALIFICATIONS. 5. TO ARRANGE VARIOUS PROGRAMMES FOR DEVELOPMENT OF JA IN COMMUNITY. 6. TO WORK FOR REMOVAL OF ILLITERACY FROM AMONG JAIN COMMUNITY. 12. ADMITTEDLY, TILL THE DATE OF PASSING THE ORDER DENYING REGISTRATION UNDER SECTION 12AA OF THE ACT, THE ASSESSEE HAD NOT CA RRIED OUT ANY ACTIVITIES IN ANY OF THE FIELDS. THE FIRST OBJECTION RAISED BY THE CIT WAS THAT SINCE THE ASSESSEE WAS NOT CARRYING ON ANY ACTIVIT Y, IT WAS NOT ENTITLED TO THE CLAIM OF REGISTRATION UNDER SECTION 12A OF THE ACT. ANOTHER OBJECTION RAISED BY THE CIT WAS THAT AS THE O BJECT CLAUSES VIDE SERIAL NOS.22 AND 23 WERE FOR THE BENEFIT OF JAIN COMMUNITY A ND HENCE WHY THE REGISTRATION UNDER SECTION 12A OF THE ACT SHOULD NOT BE REFUSED TO THE ASSESSEE TRUST AS THE SAID CLAUSES WERE IN VIOLATION OF SECTION 13(1)(B) OF THE ACT. THE PLEA OF THE ASSESSEE IN REP LY WAS THAT, THE OBJECTS WERE NOT FOR THE PROMOTION OF ANY RELIGION BU T WERE FOR THE PROMOTION OF EDUCATIONAL AND SOCIAL STANDARDS OF JAIN COMM UNITY AND ITA NO.1692/PN/2013 KUL FOUNDATION 7 ON THE BASIS OF SAME, THE REGISTRATION UNDER SECTION 12A OF THE ACT COULD NOT BE DENIED TO THE ASSESSEE. THE ASSESSEE ALS O RAISED A PLEA BEFORE THE CIT THAT THE SAID CLAUSES COULD BE MODIFIED IN C ASE IT WAS SO DESIRED BY THE CIT. THE CIT HOWEVER, WAS OF THE VIEW TH AT, THOUGH OTHER OBJECTS IN THE TRUST DEED WERE GENERAL IN NATURE , BUT THE OBJECTS VIDE SERIAL NOS.22 AND 23 WERE FOR THE SPECIFIC BENEFIT OF T HE JAIN COMMUNITY, WHICH WERE SPECIFIC RELIGIOUS COMMUNITY AND HENCE, WAS VIOLATIVE OF THE PROVISIONS OF SECTION 13(1)(B) OF THE ACT. TH E CIT ALSO NOTED THAT THE BENEFITS OF SECTIONS 11 AND 12 OF THE ACT COULD NOT BE EXTENDED TO THE CHARITABLE TRUST OR INSTITUTION, WHICH W AS ESTABLISHED FOR THE BENEFIT OF ANY SPECIFIC RELIGIOUS COMMUNITY. IN VIEW TH EREOF, THE CIT WAS OF THE VIEW THAT NO PURPOSE COULD BE SERVED BY GRANTING IT REGISTRATION UNDER SECTION 12A WHICH IS AN IN-PRINC IPLE RECOGNITION OF ENTITLEMENT OF SUCH BENEFITS. 13. UNDER THE PROVISIONS OF SECTION 12A OF THE ACT, IT IS PROVIDED THAT IN ORDER TO AVAIL THE DEDUCTION UNDER SECTIONS 11 AND 12 OF THE ACT, THE TRUST OR THE INSTITUTION HAS TO MAKE AN APPLICATION FOR R EGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN T HE PRESCRIBED MANNER BEFORE THE COMMISSIONER, BEFORE THE EXPIRY OF ONE YEAR FROM THE DATE OF CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITU TION, WHICHEVER IS LATER. SUCH TRUST OR INSTITUTION IS TO BE RE GISTERED UNDER THE PROVISIONS OF SECTION 12AA OF THE ACT. THE PROCEDURE FOR REGISTRATION IS ENLISTED IN SECTION 12AA OF THE ACT, UNDER W HICH, THE COMMISSIONER ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION, SHALL CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY, IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR I NSTITUTION AND IS ALSO EMPOWERED TO MAKE SUCH FURTHER ENQUIRIES AS HE M AY DEEM ITA NO.1692/PN/2013 KUL FOUNDATION 8 NECESSARY. THE CIT AFTER SATISFYING HIMSELF ABOUT THE OB JECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION AND WHERE HE IS NOT SO SATISFIED, HE SHALL PASS AN ORDER IN WRITING REFUSING TO R EGISTER TRUST OR INSTITUTION. IT IS FURTHER PROVIDED UNDER THE SECTION THAT, NO ORDER UNDER SUB-CLAUSE (2) I.E. REFUSING TO REGISTER THE TRUST OR INSTITUTION, SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REA SONABLE OPPORTUNITY OF HEARING. IT IS ALSO PROVIDED UNDER SECTION 12AA OF THE ACT THAT EVERY ORDER GRANTING OR REFUSING THE REGISTRAT ION TO A TRUST OR INSTITUTION SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTH S FROM THE END OF MONTH IN WHICH THE APPLICATION UNDER SECTION 12A OF THE ACT WAS RECEIVED. 14. THE CIT WHILE DISPOSING OF AN APPLICATION FOR REGISTRATION MOVED BY A TRUST OR INSTITUTION IS EMPOWERED TO CALL FOR DOCUME NTS IN ORDER TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND ALS O THE GENUINENESS OF ITS ACTIVITIES. UNDER SECTION 2(15) OF THE ACT , CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT, PRESERVATION OF MONUMENTS O R PLACES OF ARTISTIC OR HISTORIC INTEREST AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE PROVISION OF EDUCATION IS ONE OF THE OBJECTS RECOGNIZED BY THE ACT TO BE CHARITABLE OBJECT. 15. THE ASSESSEE BEFORE US, AS PER THE OBJECTS OF THE TRUST DEED, HAD BEEN CREATED IN ORDER TO ESTABLISH AND START EDUCA TIONAL INSTITUTIONS AND ALSO TO PROVIDE INCIDENTAL ACTIVITIES RELATIN G TO EDUCATION. WHERE THE PRINCIPAL OBJECT OF ANY TRUST OR IN STITUTION IS IN THE FIELD OF EDUCATION, THE SAID TRUST OR INSTITUTION CAN BE SAID TO HAVE BEEN ENGAGED IN CARRYING OUT CHARITABLE ACTIVITIES. HOWEVE R, IN THE CASE OF THE ASSESSEE AS PER OBJECT VIDE SERIAL NOS. 22 A ND 23 OF THE ITA NO.1692/PN/2013 KUL FOUNDATION 9 TRUST DEED, THE ASSESSEE ENLISTED CERTAIN OBJECTS FOR TH E PROMOTION OF EDUCATIONAL AND SOCIAL STANDARDS OF JAIN COMMUNITY. THE C IT IN VIEW OF THE SERIAL NOS.22 AND 23 OF THE OBJECT CLAUSE, WAS OF T HE VIEW THAT THE DOMINANT OBJECT OF THE TRUST WAS FOR THE PROMOTION OF A PARTICULAR RELIGION AND SERVING ITS FOLLOWERS AND AS SUCH, WAS VIOLATED T HE PROVISIONS OF SECTION 13(1)(B) OF THE ACT. 16. AT THE TIME OF GRANT OF REGISTRATION, THE POWERS OF TH E CIT ENSHRINED UNDER SECTION 12AA OF THE ACT, PROVIDED THAT T HE 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-DOMINA NT OBJECT OF PROVIDING EDUCATION BY THE TRUST OR THE INSTITUTION, TH E 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 A ND THE ASSESSEE THEREIN WOULD NOT BE ENTITLED TO THE CLAIM OF DED UCTION UNDER SECTIONS 11 AND 12 OF THE ACT AND CONSEQUENTLY, THERE WAS NO MERIT IN ALLOWING THE REGISTRATION UNDER SECTION 12A OF THE ACT. TH E ALLOWABILITY OF THE DEDUCTION UNDER SECTIONS 11 AND 12 OF THE ACT IS TO BE LOOKED INTO BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMEN T IN THE HANDS OF THE ASSESSEE AT THE RELEVANT TIME. WHETHER TH E 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 TH E CONDITIONS LAID DOWN IN SECTION 13(1)(B) OF THE ACT IS TO BE CONSIDERED B Y 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 T HE ACT, IF ITA NO.1692/PN/2013 KUL FOUNDATION 10 ANY, ARE NOT TO BE CONSIDERED BY THE CIT WHILE GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT. 17. WE FIND SIMILAR ISSUE HAS BEEN DECIDED BY THE PUNE BENC H OF THE TRIBUNAL IN ASHOKA EDUCATION FOUNDATION VS. CIT I, NASHIK , IN ITA NO.1294/PN/2009, VIDE ORDER DATED 31.12.2014, WHEREIN, IT WAS HELD AS UNDER:- 28. THE DENIAL OF REGISTRATION UNDER SECTION 12A OF THE ACT BY WAY OF ORDER PASSED UNDER SECTION 12AA(3) OF THE ACT WAS ON SIMILAR GROUNDS AS IN THE CASE OF EXEMPTION DENIED U NDER SECTION 80G(5) OF THE ACT. IN VIEW OF OUR FINDING IN THE PAR AS HEREINABOVE, WE DIRECT THE CIT TO GRANT REGISTRATION UNDER SECTI ON 12AA OF THE ACT, AS AT THE TIME OF GRANT OF REGISTRATION, THE CIT WAS ONLY EMPOWERED TO LOOK INTO THE NATURE OF ACTIVITIES CARRIE D ON BY THE ASSESSEE AND WHETHER THE SAME WERE CHARITABLE IN NATU RE AND NOT TO LOOK INTO THE APPLICABILITY OF THE PROVISIONS OF SECTION 13(1) OF THE ACT. THE ASSESSING OFFICER WHILE GRANTING TH E DEDUCTION UNDER SECTION 11 AND 12 OF THE ACT IS TO LOOK INTO T HE VIOLATION OF THE PROVISIONS OF SECTION 13(1) OF THE ACT, IF ANY. THE COMMISSIONER AT THE TIME OF GRANT OF REGISTRATION UN DER SECTION 12A OF THE ACT WAS NOT EMPOWERED IN CONSIDERING THE VIOLATION, IF ANY, UNDER SECTION 13(1) OF THE ACT. FURTHER, IN THE PARAS HEREINABOVE, WE HAVE ALREADY GIVEN A FINDING THAT THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH M/S. ABL WAS FOR TH E BENEFIT OF THE SOCIETY AND THE SAME CANNOT BE THE GROUND FOR D ENIAL OF REGISTRATION TO THE ASSESSEE TRUST UNDER SECTION 12 A OF THE ACT. THE CIT IS THUS, DIRECTED TO ALLOW THE REGISTRATION UN DER SECTION 12AA OF THE ACT. 18. FURTHER, IN SADGURU NARENDRA MAHARAJ SANSTHAN VS. C IT-II (SUPRA), THE TRIBUNAL HAD CONSIDERED THE ASPECT OF TRUST BEING ESTABLISHED FOR THE BENEFIT OF PEOPLE BELONGING TO A PARTICULA R COMMUNITY AND HAD REFERRED TO THE RATIO LAID DOWN BY THE DELHI BENCH OF THE TRIBUNAL IN AGGARWAL MITRA MANDAL TRUST VS. DIT (EXEM PTION) 119 TTJ 128 (DELHI) AND OBSERVED AS UNDER:- 11. NOW, THE NEXT OBJECTION OF THE LD. COMMISSIONER IS THAT THERE IS A VIOLATION OF SEC. 11(1)(D) AS THERE IS NO E VIDENCE TO SHOW THAT THE DONATIONS WERE GIVEN WITH THE SPECIFIC DIRE CTION THAT THEY SHOULD FORM PART OF THE CORPUS. IN OUR OPINION THE FINDING OF THE LD. COMMISSIONER ON THE SAID ASPECT IS BEYOND THE PO WERS VESTED U/S. 12AA(3) OF THE ACT. MOREOVER, IN THE CASE OF AGAR WAL MITRA MANDAL TRUST (SUPRA) IT IS HELD AS UNDER: ITA NO.1692/PN/2013 KUL FOUNDATION 11 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT ANY TRUST OR INSTITUTION SEEKING TO AVAIL THE BENEFIT OF THE PROVISIONS OF SS. 11 AND 12 IS REQUIRED TO APPLY FOR REGISTRATION UNDER S. 12A. THE PROCEDURE FOR REGISTR ATION IS PRESCRIBED IN S. 12AA AND AS PER THE PROVISIONS OF S UB-S. (1) OF THAT SECTION, THE CIT [DIRECTOR OF IT (EXEMPTION) IN THE PRESENT CASE] IS EMPOWERED TO SATISFY HIMSELF ABOUT THE OBJECT OF THE TRUST AND ABOUT THE GENUINENESS OF TH E ACTIVITIES OF THE TRUST OR INSTITUTION BEFORE GRANTIN G THE REGISTRATION UNDER S. 12A. ONCE THE CIT HAS NOT DOUBT ED THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE NOR DOUBTED ITS CHARITABLE OBJECT, HE CANNOT REFUSE TO GRANT REGISTRA TION UNDER S. 12A. IN THE PRESENT CASE, THE REGISTRATION, HO WEVER, WAS REFUSED BY THE DIRECTOR OF IT (EXEMPTION) ON THE GROUND THAT AS PER THE OBJECT CLAUSE NOS. 3(1) AND 3(2), THE ASSESSEE TRUST WAS ESTABLISHED FOR THE BENEFIT OF P EOPLE BELONGING TO VAISH COMMUNITY ONLY WHICH WAS CLEARLY IN VIOLATION OF S. 13(1)(B). HOWEVER, AS HELD BY HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION (SUPRA), AN OBJECT BENEFICIAL TO THE SECTIO N OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY AND TO SERVE A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT THE OBJE CT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR ALL PERSO NS IN A PARTICULAR COUNTRY OR STATE. EXPLAINING FURTHER, IT WAS OBSERVED BY THE HONBLE APEX COURT THAT IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIED INDIVIDUAL. RELYING ON THIS DECISION OF HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION (SUPRA), HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SURJI DEVI. KUNJI LAL JAIPURIA CHARITABLE TRUST (SUPRA) HAS HELD THAT TRUST CREATED FOR GIVING MEDICAL AID, SOCIAL WELFARE AND UPL IFTMENT OF POOR MEMBERS OF VAISH COMMUNITY IS, THEREFORE, FOR RELIGIOUS AND CHARITABLE PURPOSES. TO THE SIMILAR EFFE CT IS ANOTHER DECISION OF HONBLE ALLAHABAD HIGH COURT IN TH E CASE OF CIT VS. PT. RAM SHANKER MISRA TRUST (1996) 222 ITR 252 (ALL) WHEREIN IT WAS HELD THAT EXPENDITURE INCURRED BY A TRUST FOR THE BENEFIT OF ONE COMMUNITY IS AN EXPENDIT URE INCURRED ON A PUBLIC CHARITABLE OBJECT. THE PROPOSITI ON PROPOUNDED BY HONBLE SUPREME COURT AS WELL AS BY HONBLE ALLAHABAD HIGH COURT IN THE AFORESAID JUDGMENT S CLEARLY SHOWS THAT THE OBJECTS OF THE ASSESSEE TRUST AS INDICATED IN OBJECT CLS. 3(1) AND 3(2) OF ITS TRUST D EED WERE OF CHARITABLE NATURE AND SINCE THE POWERS OF THE CIT/DIR ECTOR OF IT (EXEMPTION) CONFERRED UNDER S. 12AA WERE CONFIN ED TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITI ES OF THE TRUST AS WELL AS NATURE OF ITS OBJECT BEING CHARITABLE, WE ARE OF THE VIEW THAT HE WAS NOT JUSTIFIED IN REFUSING T O GRANT REGISTRATION TO THE ASSESSEE TRUST UNDER S. 12A MERE LY ON THE GROUND THAT THE SAID OBJECTS WERE VIOLATIVE OF THE PROVISIONS OF S. 13(1)(B). AS HELD BY LUCKNOW BENCH OF TRIBUNAL IN THE CASE OF ST. DON BOSCO EDUCATIONAL SOCI ETY VS. CIT (2004) 84 TTJ (LUCKNOW) 805 : (2004) 90 ITD 477 (LUCKNOW), THE CIT UNDER S. 12AA IS EMPOWERED TO SATIS FY HIMSELF ONLY ABOUT THE OBJECT OF THE TRUST AND ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND SUCH POWER ITA NO.1692/PN/2013 KUL FOUNDATION 12 DOES NOT EXTEND TO ELIGIBILITY OF THE TRUST/INSTITUTIO N FOR EXEMPTION UNDER S. 11 R/W S. 13 WHICH FALLS WITHIN THE DOMAIN OF THE AO. TO THE SIMILAR EFFECT IS THE DECISI ON OF DELHI BENCH OF TRIBUNAL IN THE CASE OF ARYAN EDUCATIO NAL SOCIETY VS. CIT (2005) 94 TTJ (DEL) 462 : (2005) 93 ITD 546 (DEL) WHEREIN IT WAS HELD THAT SO LONG AS THE PROVISION S OF SS. 11, 12 AND 12A ARE COMPLIED WITH, THE EXEMPTION CANNOT BE DENIED MERELY BECAUSE THERE IS ANY VIOLATION OF THE PROVISIONS OF S. 13. 7. AS ALREADY NOTED, THE PROCEDURE FOR REGISTRATION LA ID DOWN IN S. 12AA REQUIRES THE CIT TO SATISFY HIMSELF A BOUT THE GENUINENESS OF ACTIVITIES AND OBJECT OF THE TRUS T OR INSTITUTION AND AS SUCH, THE SCOPE OF HIS POWERS IS L IMITED IN THIS REGARD TO MAKE SUCH ENQUIRIES, AS HE MAY DEEM F IT, TO SATISFY HIMSELF IN RESPECT OF THESE TWO ASPECTS. AS H ELD BY HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION (SUPRA), AN OBJECT BENEFICIAL TO THE SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY AND TO SERVE A CHARITABLE PURPOSE, IT IS SUFFICIENT IF THE IN TENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIED INDIVIDUAL. THIS DECISION OF HONBLE APEX CO URT FOLLOWED SUBSEQUENTLY BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SURJI DEVI KUNJI LAL JAIPURIA CHARITABLE TR UST (SUPRA) AND IN THE CASE OF PT. RAM SHANKER MISRA TRUS T (SUPRA) TO HOLD THAT THE EXPENDITURE INCURRED BY A TR UST FOR THE BENEFIT OF ONE COMMUNITY IS AN EXPENDITURE INCUR RED ON A PUBLIC CHARITABLE OBJECT STILL HOLDS THE FIELD NOTWITHSTANDING THE PROVISIONS CONTAINED IN S. 13(1)(B) SI NCE THE DEFINITION OF THE TERM 'CHARITABLE PURPOSE' GIVEN IN S. 2(15) CONTINUES TO REMAIN THE SAME. THE PROVISIONS OF S. 13(1) ARE THUS NOT DIRECTLY RELEVANT IN THIS REGARD. ON THE OTHER HAND, THE SAID SECTION BEGINS WITH THE WORDS 'N OTHING CONTAINED IN S. 11 OR S. 12 SHALL OPERATE SO AS TO EXCLU DE, FROM THE TOTAL INCOME OF THE PREVIOUS YEAR, OF THE PERSON.........' WHICH CLEARLY ENVISAGES OPERATION OF S. 11 O R S. 12 BEFORE THE PROVISIONS OF S. 13 CAN BE APPLIED O R INVOKED IN A GIVEN CASE. IT ALSO SHOWS THAT THE SAID PROVISIONS CAN BE APPLIED OR INVOKED ONLY AT THE TIME OF COMPUTATION OF TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON WHO IS CLAIMING EXEMPTION UNDER S. 11 OR S. 12. BOTH THESE SITUATIONS CONTEMPLATED IN S. 13 CAN ARISE ONLY AND ONLY IF REGISTRATION UNDER S. 12A IS GRANTED TO THE S AID PERSON. IF THE SAME IS NOT GRANTED AND THE PERSON IS REFUSED THE REGISTRATION UNDER S. 12A, HE WOULD NOT BE ENTITLED TO CLAIM ANY BENEFIT AVAILABLE UNDER S. 11 OR 12 AND THER E WILL BE NO OCCASION TO THE AO TO INVOKE OR APPLY S. 13 IN HIS CASE. THIS POSITION WOULD NOT ONLY BE CONTRARY TO THE SCHEME OF THE ACT AS LAID DOWN IN SS. 11, 12, 12A, 12AA AND 13 BUT THE SAME MAY ALSO CAUSE PREJUDICE/HARDSHI P TO THE PERSONS IN CERTAIN CASES. FOR INSTANCE, THE OBJECT S, FOR WHICH THE ASSESSEE TRUST IN THE PRESENT CASE IS EST ABLISHED, AS INDICATED IN OBJECT CLS. 3(1) AND 3(2), NO DOUBT ARE FOR THE BENEFITS OF A PARTICULAR COMMUNITY, VIZ., VAISH. NEVERTHELESS, AS PER OBJECT CL. 3(4), IT WAS ALSO ESTABLISH ED TO RUN SCHOOLS, COLLEGES, HOSPITALS, ETC. FOR THE BENEFIT O F PUBLIC AT LARGE. IN THIS SITUATION, IF THE REGISTRATIO N APPLIED ITA NO.1692/PN/2013 KUL FOUNDATION 13 FOR UNDER S. 12A IS NOT GRANTED TO IT FOR VIOLATION OF PROVISIONS OF S. 13(1)(B) AND IT IS ULTIMATELY FOUND THAT THE ASSESSEE TRUST ACTUALLY ACCOMPLISHED THE OBJECTS AS INDICATED IN CL. 3(4) ONLY FOR THE BENEFIT OF PUBLIC AT LARGE WITHOUT THERE BEING ANY ACTIVITY UNDERTAKEN AS PER O BJECT CLS. 3(1) AND 3(2), IT WOULD BE DEPRIVED OF ANY BENEFITS WHICH OTHERWISE WERE AVAILABLE TO IT UNDER S. 11 OR S. 12. THIS CERTAINLY IS NOT THE LEGISLATIVE INTENTION AS RE FLECTED IN THE SCHEME LAID DOWN IN SS. 11, 12, 12A, 12AA AND 13. O N THE CONTRARY, THE PHRASEOLOGY OF S. 13, AS ALREADY DISCUSSED, MAKES IT EXPLICITLY CLEAR THAT THE SAID PROV ISIONS BECOME OPERATIVE OR RELEVANT ONLY AT THE STAGE OF ASSESSMENT WHEN THE AO IS REQUIRED TO EXAMINE THE C LAIM OF THE ASSESSEE FOR BENEFITS UNDER S. 11 OR S. 12 WH ILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE OF THE RELE VANT PREVIOUS YEAR. THE APPLICATION OF S. 13 THUS FALLS WITHI N THE EXCLUSIVE DOMAIN OF THE AO AND THE PROVISIONS CONTAI NED THEREIN CAN BE INVOKED BY HIM WHILE FRAMING THE ASSESSMENT AND NOT BY THE CIT WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER S. 12AA. 12. HENCE, IN OUR OPINION THE LD. COMMISSIONER EXCEEDE D HER JURISDICTION ON THE SAID ISSUE ALSO FOR GIVING ONE OF THE REASONS FOR CANCELLING THE REGISTRATION OF THE ASSESSEE BY EXERC ISING THE POWERS U/S. 12AA(3) OF THE ACT. THE NEXT OBJECTION IS IN RESPECT OF THE AMENDMENT TO THE TRUST DEED. THERE IS NO DISPUT E ABOUT THE FACT THAT THE ASSESSEE TRUST IS REGISTERED UNDER TH E BOMBAY PUBLIC TRUST ACT, 1950 AND ALL THE AMENDMENTS MADE TO THE T RUST DEED WERE SUBJECT MATTER OF THE ENQUIRY AND SCRUTINY BY THE ASSISTANT CHARITY COMMISSIONER, RATNAGIRI WHICH DETAILS ARE GIVE N HERE-IN- ABOVE. WE FIND THAT THE LD. COMMISSIONER HAS GIVEN O NE MORE REASONS THAT THE POWERS TO APPOINT OR REMOVE ANY TR USTEE IS VESTED IN THE CHIEF TRUSTEE ONLY AND LD. COMMISSIONE R HAS FURTHER CONCLUDED THAT THE ASSESSEE TRUST IS LIKE PR IVATE TRUST. AS PER THE AMENDED TRUST DEED FILED BEFORE US IN OUR OP INION THE LD. COMMISSIONER HAS NOT PROPERLY APPRECIATED THE MAIN O BJECTS OF THE TRUST BUT SHE IS MORE CONCERNED ABOUT THE MANAG EMENT OF THE TRUST. SEC. 12AA(3) LIMIT THE JURISDICTION OF THE LD. COM MISSIONER TO EXAMINE THE ACTIVITIES VIS--VIS THE OBJECTS OF THE TRU ST. 19. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE ON THE OTHER HAND, HAD RELIED UPON THE RATIO LAID DOWN BY HON BLE HIGH COURT OF MADHYA PRADESH (INDORE BENCH) IN CIT, UJJAIN VS. DAWO ODI BOHATA JAMAT (SUPRA), WHEREIN IT WAS HELD AS UNDER:- UNDER SECTION 260A(1), THE APPEAL LIES TO THE HIGH CO URT ON A SUBSTANTIAL QUESTION OF LAW. THE SCOPE OF APPEAL UNDER SECTION 260A IS SAME AS THAT OF A SECOND APPEAL UNDER SECTIO N 100 OF THE CODE OF CIVIL PROCEDURE. THE SUPREME COURT IN A CATEN A OF DECISIONS HAS RULED THAT FINDING OF FACT RECORDED BY THE FINAL FACT FINDING TRIBUNAL/COURT IS BINDING ON THE HIGH COURT EXERCISING SECOND APPELLATE JURISDICTION AND UNLESS SUCH FINDING IS PERVERSE IN NATURE, IT IS BINDING ON THE SECOND APPELLATE COURT. [PAR A 11] ITA NO.1692/PN/2013 KUL FOUNDATION 14 A FINDING RECORDED BY THE TRIBUNAL ON THE NATURE OF ACTIVITIES AND OBJECTS OF THE TRUST WAS ESSENTIALLY A FINDING OF FACT. [PAR A 12] IN THE INSTANT CASE, THE TRIBUNAL, ON THE BASIS OF THE EVIDENCE LED BY BOTH THE PARTIES, HAD RECORDED A FINDING THAT THE ASSESSEE WAS A PUBLIC RELIGIOUS TRUST. THE REVENUE HAD NEITHER ASS AILED THE AFORESAID FINDING RECORDED BY THE TRIBUNAL AS PERVER SE NOR IT HAD BEEN ABLE TO POINT OUT ANY PERVERSITY IN THE SAID FIN DING. THEREFORE, SAID FINDING WAS BINDING ON THE COURT. THE REFORE, THERE WAS NO GOOD REASON TO INTERFERE IN SUCH FINDING OF FACT. [ PARA 13] A PERUSAL OF THE ORDER OF THE TRIBUNAL ALSO INDICATED THAT THE SAME ISSUE HAD COME UP IN RESPECT OF GRANT OF REGISTRATIO N TO DAWOODI BOHRA JAMAT BEFORE THE TRIBUNAL, AHMEDABAD BENCH, WHIC H BY AN ORDER DATED 10-3-2006 HAD HELD THE SAID TRUST TO B E ENTITLED TO REGISTRATION UNDER SECTION 12A. THAT ALSO SHOWED THAT NOT ONLY THE TRIBUNAL, INDORE, BUT THE TRIBUNAL IN THE OTHER STATES ON THE SAME FACTS HAD FOUND THE TRUST OF DAWOODI BOHRA JAMAT LOC ATED WITHIN THEIR JURISDICTION TO BE ENTITLED TO CLAIM REGISTRATIO N UNDER THE ACT. [PARA 1.4] THEREFORE, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT ALL THE OBJECTS OF THE ASSESSEE-TRUST WERE RELIGIOUS IN NATURE. [PARA 15 ] AS REGARDS THE APPLICABILITY OF THE PROVISIONS OF SE CTION 13(L)(B), THE TRIBUNAL HAD HELD THAT SINCE THE ASSESSEE WAS A RELIGIOUS TRUST, THE PROVISIONS OF SECTION 13(1 )(B) WOULD NOT BE APPLICABLE, BECAUSE THE SAME ARE APPLICABLE I TO THE CASE OF TH E TRUST ESTABLISHED FOR CHARITABLE PURPOSES. THERE WAS NO ERRO R IN SUCH A CONCLUSION OF THE TRIBUNAL [PARA 17] IN THE INSTANT APPEAL, THE TRIBUNAL HAD FOUND AS A FAC T AFTER ANALYZING THE OBJECTS OF THE TRUST THAT THE ASSESSE E WAS A PUBLIC RELIGIOUS TRUST AND ITS OBJECTIVES WERE SOLELY RELIGIO US IN NATURE. [PARA 19] IN VIEW OF THE AFORESAID ANALYSIS, THE APPEALS WERE TO BE DISMISSED. [PARA 20] 20. THE HONBLE HIGH COURT OF MADHYA PRADESH IN CIT, UJJ AIN VS. DAWOODI BOHATA JAMAT (SUPRA) HAD UPHELD THE FINDING OF TRIB UNAL THAT SINCE THE ASSESSEE WAS A RELIGIOUS TRUST, PROVISIONS OF SEC TION 13(1)(B) OF THE ACT WOULD NOT BE APPLICABLE. HOWEVER, IN THE FACTS O F THE PRESENT CASE, THERE IS NO FINDING OF THE CIT THAT THE ASS ESSEE WAS A RELIGIOUS TRUST, BUT THE OBJECTION OF CIT WAS THAT THE TR UST WAS CREATED FOR THE PURPOSE OF PARTICULAR COMMUNITY. ITA NO.1692/PN/2013 KUL FOUNDATION 15 21. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESE NTATIVE FOR THE ASSESSEE, HAD RELIED UPON THE RATIO LAID DOWN BY HON BLE ALLAHABAD HIGH COURT IN HARDAYAL CHARITABLE & EDUCATIONAL TRUST VS. C IT-II (SUPRA) WHEREIN IT WAS HELD THAT AT THE TIME OF REGISTRATION UNDER SECTION 12A OF THE ACT, IT IS NOT NECESSARY TO LOOK INTO THE ACTIVITIES VIS- -VIS CLAIM OF EXEMPTION UNDER SECTIONS 11 AND 12 OF THE A CT. SIMILAR VIEW HAS BEEN LAID DOWN BY THE HONBLE DELHI HIGH COURT IN AGGARWAL MITRA MANDAL TRUST VS. DIT (EXEMPTION) (SUPRA), WHICH WAS R EFERRED TO BY THE PUNE BENCH OF THE TRIBUNAL IN SADGURU NARENDRA MAHARAJ SANSTHAN VS. CIT-II (SUPRA). THE HONBLE SUPREME COURT IN CIT VS. DAWOODI BOHARA JAMAT (SUPRA) HAD ALSO LAID DOWN SIMILAR PRO POSITION. ACCORDINGLY, THE VIEW FAVOURABLE TO THE ASSESSEE IS ADOP TED FOR DECIDING THE ISSUE. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND THE LEGAL PROPOSITIONS, WE FIND NO MERIT IN THE ORDER OF CIT IN THIS REGARD AND ACCORDINGLY, WE DIRECT THE CIT TO GRANT REGISTRATION TO THE ASSESSEE TRUST UNDER SECTION 12A O F THE ACT AND PASS THE ORDER UNDER SECTION 12AA OF THE ACT REGISTER ING THE SAID TRUST. 22. THE SECOND ASPECT OF THE ISSUE RAISED BY THE CIT WA S 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. T HE 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. ME RELY BECAUSE THAT THE SAID ACTIVITY HAS NOT STARTED, DOES NO T DIS-ENTITLE THE ASSESSEE FROM THE CLAIM OF REGISTRATION UNDER SECTION 12A OF THE ACT. WE FIND THAT SIMILAR ISSUE AROSE BEFORE THE HONBLE HIGH COU RT OF GUJARAT IN DIRECTOR OF INCOME TAX (EXEMPTION) VS. PANNA LA LBHAI FOUNDATION (SUPRA) AND IT WAS HELD AS UNDER:- ITA NO.1692/PN/2013 KUL FOUNDATION 16 5. IT CAN THUS BE SEEN THAT UNDER SECTION 12AA OF TH E ACT, THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE OBJECT IVES OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. FOR SUCH PURPOSE, HE HAS THE POWER TO CALL FOR SUCH DOCUMENTS OR INFORMAT ION FROM THE TRUST AS HE THINK ARE NECESSARY. HOWEVER, THIS DOES NOT MEAN THAT IF THE ACTIVITIES OF THE TRUST HAVE NOT COMMENCED, T HE COMMISSIONER HAS AUTHORITY TO REJECT ITS APPLICATION FOR REGISTRATION ON THE GROUND THAT THE TRUST FAILED TO CONVINCE HIM ABOUT THE GENUINENESS OF THE ACTIVITIES. THAT IS WHAT UNFO RTUNATELY THE COMMISSIONER DID IN THE PRESENT CASE. IN THAT VI EW OF THE MATTER, WE SEE NO ERROR IN THE TRIBUNAL'S IMPUGNED OR DER REVERSING THE ORDER OF THE COMMISSIONER. IT IS OF COURSE TRUE T HAT EVEN IF THE ACTIVITIES OF THE TRUST HAVE NOT COMMENCED, IF THE CO MMISSIONER HAS SUFFICIENT MATERIAL IN HIS COMMAND, HE MAY STILL COM E TO THE CONCLUSION THAT HE IS NOT SATISFIED ABOUT THE OBJECT IVES OF THE TRUST OR THE GENUINENESS OF ITS ACTIVITIES. WE UNDERSTAND T HE DECISION OF THE TRIBUNAL ACCORDINGLY. 6. IN THE PRESENT CASE, HOWEVER, MERELY ON THE GROUND THAT THE ACTIVITIES OF THE TRUST HAD NOT COMMENCED, THE COMMIS SIONER WAS PERSUADED TO REJECT ITS APPLICATION FOR REGISTRATION , WHICH IN OUR OPINION, WAS NOT APPROPRIATE AND THEREFORE, RIGHTLY I NTERFERED BY THE TRIBUNAL.' 5. AS CAN BE NOTED IN THE INSTANT CASE ALSO, FOR AVAI LING BENEFITS UNDER SECTIONS 11 AND 12, THE TRUST MADE AN APPLICAT ION UNDER SECTIONS 12A FOR REGISTRATION U/S. 12AA BEFORE THE D IRECTOR OF INCOME-TAX (EXEMPTION). IT ALSO FURTHER EMERGES THAT C OMMISSIONER SINCE IS REQUIRED TO CALL FOR DOCUMENTS AND INFORMATI ON FROM THE TRUST IF HE DEEMS IT NECESSARY IN ORDER TO SATISFY A BOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, HE, IN THI S CASE ALSO, MADE SUCH INQUIRIES. AFTER DULY SATISFYING HIMSELF ABO UT THE OBJECTS OF THE TRUST AND GENUINENESS OF THE ACTIVITI ES, HE IS REQUIRED TO GRANT REGISTRATION AS HELD HEREINABOVE. T HE POWERS OF THE COMMISSIONER TO SATISFY HIMSELF ABOUT OBJECTS AN D THE GENUINENESS OF THE ACTIVITIES ARE RECOGNIZED UNDER L AW. HOWEVER, ONLY BECAUSE THE TRUST HAS NOT COMMENCED THE ACTIVITI ES, THE COMMISSIONER WOULD HAVE NO AUTHORITY TO IPSO FACTO R EJECT THE APPLICATION FOR REGISTRATION ON THAT COUNT ALONE. 6. IN THE INSTANT CASE, THE DIRECTOR OF INCOME-TAX (EX EMPTION) HELD THAT TRUST HAD NOT COMMENCED ITS ACTIVITIES AND DENIE D REGISTRATION. HOWEVER, THERE WAS NOTHING TO INDICATE ANY MATERIAL TO CONCLUDE THAT THE OBJECTS OF THE TRUST OR THE ACT IVITIES OF THE TRUST WERE NOT GENUINE OR ANY DOUBT AROSE IN RESPEC T OF THE GENUINENESS OF THE ACTIVITIES. THE TRIBUNAL, IN THE INS TANT CASE, THEREFORE, HAS RIGHTLY HELD IN FAVOUR OF THE ASSESSEE BY INTERFERING WITH SUCH AN ORDER. CONSIDERING THE OBJECTS OF THE T RUST, THE TRIBUNAL, WITH COGENT REASONS, DIRECTED THE DIT(E) TO G RANT REGISTRATION U/S. 12AA ON AN APPLICATION PREFERRED U NDER SECTIONS 12A. 23. IN VIEW THEREOF, WE FIND NO MERIT IN THE ORDER OF CIT IN REFUSING TO GRANT REGISTRATION UNDER SECTION 12A OF THE ACT, AS T HE ASSESSEE HAD NOT STARTED ITS ACTIVITIES. FOLLOWING THE ABOVE SAID RATIO LAID DOWN BY ITA NO.1692/PN/2013 KUL FOUNDATION 17 HONBLE HIGH COURT OF GUJARAT (SUPRA), WE DIRECT THE CIT TO GRANT REGISTRATION UNDER SECTION 12A OF THE ACT AND ISSUE THE NECESSARY CERTIFICATE UNDER SECTION 12AA OF THE ACT. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JANUARY, 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 30 TH JANUARY, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-I, PUNE; 4) THE DR A BENCH, I.T.A.T., PUNE; 5) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE