Cricket for Rajkot District, RAJKOT-GUJARAT V. The Commr. of Income Tax-II, RAJKOT-GUJARAT

ITA 261/RJT/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2235 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 05-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Reasonable cause; Benefit of exemption; Condonation of delay
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 261/RJT/2015 CRICKET FOR RAJKOT DISTRICT 4 TH FLOOR, KITAB GHAR, SHROFF ROAD, RAJKOT. VS. THE CIT-II, RAJKOT. [PAN NO. AAAAS 2360 J] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI CHETAN AGARWAL, A.R. RESPONDENT BY : SHRI JITENDRA KUMAR, CIT-D.R. DATE OF HEARING 30/08/2018 DATE OF PRONOUNCEMENT 16/11/2018 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL HAS BEEN FILED BEFORE US BY THE ASSESSEE AGAINST THE ORDER OF REJECTION OF THE APPLICATION FOR REGISTRATION U/S12 AA BY THE COMMISSIONER OF INCOME TAX-II, RAJKOT. AN APPLICATION FOR CONDONATION OF DELAY IN PREFERR ING THE INSTANT APPEAL HAS ALSO BEEN FILED BY THE REPRESENTATIVE OF THE ASSESSEE ON 05.06.2015 BY WHICH REASONABLE CAUSE HAS BEEN SHOWN FOR SUCH DELAY. WE HAVE GONE THROUGH THE SAME AND ARE SATISFIED ON THE REASONS EXPLAINED BY THE REPRESENTATIVE OF THE ASSE SSEE. THUS, THE DELAY IS CONDONED. 2. AN APPLICATION FOR REGISTRATION U/S 12AA WAS FIL ED BY THE ASSESSEE ON 09.01.2014. FACTUALLY, THE TRUST WAS ESTABLISHED ON 19.06.2013 WITH 26 OBJECTS MENTIONED IN THE MEMORANDUM OF ASSOCIATION WHICH WAS ANNEXED TO THE SAID APPLICATION BEFORE THE COMMISSIONER OF INCOME TAX, FOR CONSIDERATION. THE MAIN OBJECT OF THE TRUST IS TO CONTROL - 2 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR THE GAME OF CRICKET IN RAJKOT AND TO ENCOURAGE AND ORGANIZE CRICKET TOURNAMENTS INCLUDING WOMENS CRICKET. THE OBJECTS OF THE ASSES SEE CRICKET FOR RAJKOT DISTRICT ARE CHARITABLE WITHIN THE MEANING OF CIRCULAR: NO. 395 [F. NO. 181(5) 82/I.T(A-I)] DATED 24.09.1984 EXPLAINED BY THE ASSESSEE. HOWEVER, THE SAME WAS REJECTED BY THE LEARNED CIT ON SEVERAL GROUNDS UPON WHICH THE INSTANT APPEA L BEFORE US. THE LEARNED CIT IN THE ORDER NOTICED THAT THE OBJECTS OF THE ASSESSEE APPE ARS TO BE OVERLAPPING THE OBJECTS OF SAURASHTRA CRICKET ASSOCIATION. FURTHER THAT THE AS SOCIATION INTENTS TO HAVE OVERALL CONTROL OVER THE MANAGEMENT OF THE SAURASHTRA CRICKET ASSOC IATION AND ITS FUNCTIONS. FURTHER THAT THE ADDRESS OF THE ASSOCIATION MENTIONED IN THE SAI D APPLICATION WAS FAKE. NO CHARITABLE ACTIVITY WAS FOUND TO BE CARRIED OUT FROM SUCH PLAC E HAS ALSO OPINED BY THE LEARNED CIT. THE PRESIDENT OF THE ASSESSEE IS ALSO THE PRESIDENT OF SAURASHTRA CRICKET ASSOCIATION AND THEREFORE THE LEARNED CIT COULD NOT FIND ANY REASON TO FORM THE NEW ASSOCIATION AS APPLIED FOR. LAST BUT NOT THE LEAST THE LEARNED CIT (A) SOUGHT TO JUSTIFY THE REJECTION BY OBSERVING THAT THE OBJECTS OF ENCOURAGING CRICKET M ATCH BY THE SAID TRUST IS NOTHING BUT COMMERCIAL ACTIVITY. EARNINGS BY WAY OF SPONSORSHIP S, SALE OF BROADCASTING RIGHTS, GROUND ADVERTISEMENTS AND SALE OF EXPENSIVE TICKETS ARE IN THE NATURE OF COMMERCIAL ACTIVITIES AND HIT BY THE PROVISO OF SECTION 2(15) OF THE ACT. THE TRUST, IS, THEREFORE, IS NOT A CHARITABLE INSTITUTION/ORGANIZATION AND DOES NOT DESERVE REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 AS CONCLUDED BY THE LEARNED CI T. 3. AT THE TIME OF HEARING OF INSTANT APPEAL, THE LE ARNED REPRESENTATIVE OF THE ASSESSEE VEHEMENTLY ARGUED AGAINST THE ORDER OF REJ ECTION MADE BY THE LEARNED CIT FIRSTLY ON THE BASIC GROUND THAT NO DEFECT HAS BEEN POINTED OUT BY THE AUTHORITIES BELOW IN THE SAID APPLICATION WHILE REJECTING THE SAME FOR R EGISTRATION OF THE TRUST. HE FURTHER SUBMITTED THAT AT THE STAGE OF GRANT OF REGISTRATIO N U/S 12A OF THE ACT THE AUTHORITIES BELOW IS SUPPOSED TO EXAMINE ONLY THE OBJECTS OF TH E TRUST AND IT IS NOT APPROPRIATE ON HIS PART TO EXAMINE THE ASPECT OF INCOME AT THE STAGE O F GRANTING REGISTRATION U/S 12AA, THE DUTIES WHEREOF VESTS UPON THE ASSESSING OFFICER ON A YEAR TO YEAR BASIS AT THE TIME OF - 3 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR CLAIMING EXEMPTIONS U/S 11 OF THE ACT. THE LEARNED REPRESENTATIVE OF THE ASSESSEE FURTHER RELIED UPON THE JUDGMENT PASSED BY THE LEAR NED TRIBUNAL, DELHI BENCH IN ITA NO.309/DEL/2016 ON THE SAME ISSUE REGARDING GRANT O F REGISTRATION UNDER SECTION 12AA OF THE ACT; NEEDLESS TO MENTION THAT THE LEARNED TRIBU NAL PASSED ORDER IN FAVOUR OF THE ASSESSEE. 4. ON THE OTHER HAND, LD. REPRESENTATIVE OF THE DEP ARTMENT SUBMITTED THAT DESPITE VARIOUS OPPORTUNITIES GIVEN TO THE ASSESSEE TO FURN ISH PARTICULARS NO ASSISTANCE, WHATSOEVER WAS PROVIDED BY IT BEFORE THE AUTHORITIE S BELOW. HE, THEREFORE, RELIES ON THE ORDER IMPUGNED BEFORE US. 5. WE HAVE HEARD THE LEARNED COUNSEL APPEARING FOR THE PARTIES WE HAVE PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. THE SHORT P OINT INVOLVED IN THIS MATTER IS THAT AS TO WHETHER THE APPELLANT IS ENTITLED TO GET THE GRANT OF REGISTRATION U/S 12AA OF THE ACT IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. THIS T RUST IS A REGISTERED SOCIETY UNDER THE SOCIETY REGISTRATION ACT, EVIDENCE WHEREOF IS ALSO ANNEXED TO THE RECORD. IT APPEARS THAT THE SAURASHTRA CRICKET ASSOCIATION IS HAVING A SEPA RATE BOARD OF TRUSTEE BEING AN INDEPENDENT TRUST WITH OBJECTS MENTIONED IN THEIR T RUST DEED. THEREFORE, QUESTION OF CONTROLLING OVER THE SAME BY THE ASSESSEE DOES NOT ARISE AT ALL. THE ADDRESS MENTIONED IN THE APPLICATION OF THE TRUST IS RESIDENTIAL ADDRESS OF THE MANAGING TRUSTEE NAMELY SHRI NIRANJAN R. SHAH AND SAME IS ONLY FOR THE MANAGING ACTIVITIES OF THE TRUST AND IS KNOWN AS OFFICE. SO FAR AS, THE SUBMISSION MADE BY THE LE ARNED REPRESENTATIVE OF THE DEPARTMENT OF NOT PROVIDING ANY ASSISTANCE BY THE A SSESSEE IS NOT CORRECT IN VIEW OF THE LETTER SUBMITTED ON 23.07.2014 ENCLOSED AT PAGE 34 & 35 OF THE PAPER BOOK FILED BY THE ASSESSEE BEFORE US. THE EXPLANATION AND/OR CLARIFIC ATION REGARDING CHARITABLE PURPOSE OF THE TRUST HAS DULY BEEN MADE BY THE ASSESSEE BY AND UNDER THE SAID LETTER DATED 23.07.2014 BEFORE THE LEARNED COMMISSIONER OF INCOM E TAX II, RAJKOT. FURTHER THAT WE DO NOT FIND ANY REASON AS TO WHY ONE PERSON BEING T HE PRESIDENT OF THE SAURASHTRA CRICKET - 4 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR ASSOCIATION CANNOT BE THE MANAGING TRUSTEE OF ANOTH ER TRUST AS FOUND BY THE LEARNED COMMISSIONER OF INCOME TAX IN THE ORDER IMPUGNED. N O REASONABLE EXPLANATION IN THIS REGARD HAS BEEN PROVIDED IN THE SAID ORDER. WHILE D EALING THE ASPECT OF COMMERCIAL ACTIVITIES PERFORMED BY THE TRUSTEE WE NEED TO DISC USS PARTICULAR PROVISION UNDER SECTION 2(15) OF THE ACT WHICH DEFINES CHARITABLE PURPOSE A S FOLLOWS: [(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE P OOR, EDUCATION [YOGA] MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLUDING WAT ER-SHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY;] IN THIS REGARD THE RELEVANT CIRCULAR BEING NO. 395 [F. NO. 181(5) 82./I.T.(A-I)] DATED 24.09.1984 SPEAKS AS FOLLOWS: SECTION 2(15) CHARITABLE PURPOSE WHETHER PROMOTION OF SPORTS AND GAMES CAN BE CONSI DERED TO BE CHARITABLE PURPOSE 1. THE EXPRESSION CHARITABLE PURPOSE IS DEFINED IN S ECTION 2(15) TO INCLUDE RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND T HE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. 2. THE QUESTION WHETHER PROMOTION OF SPORTS AND GAMES CAN BE CONSIDERED AS BEING A CHARITABLE PURPOSE HAS BEEN EXAMINED THE BO ARD ARE ADVISED THAT THE ADVANCEMENT OF ANY OBJECT BENEFICIAL TO THE PUBLIC OR SECTION OF THE PUBLIC AS DISTINGUISHED FROM AN INDIVIDUAL OR GROUP OF INDIVI DUALS WOULD BE AN OBJECT OF GENERAL PUBLIC UTILITY. IN VIEW THEREOF, PROMOTION OF SPORTS AND GAMES IS CONSIDERED TO BE A CHARITABLE PURPOSE WITHIN THE ME ANING OF SECTION 2(15). THEREFORE, AN ASSOCIATION OR INSTITUTION ENGAGED IN THE PROMOTION OF SPORTS AND GAMES CAN CLAIM EXEMPTION UNDER SECTION 11 OF THE A CT, EVEN IF IT IS NOT APPROVED UNDER SECTION 10(23) RELATIONG TO EXEMPTIO N FROM TAX OF SPORTS ASSOCIATIONS AND INSTITUTIONS HAVING THEIR OBJECTS AS THE PROMOTION, CONTROL, REGULATION AND, ENCOURAGEMENT OF SPECIFIED SPORTS A ND GAMES. IT APPEARS THAT THE OBJECT OF THE TRUST SHOULD BE THE PRINCIPAL CONSIDERATION OF THE LD CIT WHILE GRANTING REGISTRATION. IN FACT, IT IS THE DUTY OF THE ASSESSING OFFICER TO EXAMINE THE INCOME ON A YEAR TO YEAR BASIS AT THE T IME OF CLAIMING EXEMPTIONS U/S 11 OF THE ACT OF THE TRUST. IT IS NOT THE DUTY OF THE LEA RNED CIT TO EXAMINE AS TO WHETHER THE - 5 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR INCOME DERIVED BY THE TRUST IS BEING SPENT FOR CHAR ITABLE PURPOSE OR THAT THE TRUST IS EARNED PROFIT WHILE GRANTING REGISTRATION. WHILE GR ANTING REGISTRATION U/S 12A OF THE ACT THE GENUINENESS OF THE TRUST IS REQUIRED TO BE EXAM INED TAKING INTO CONSIDERATION THE OBJECT OF THE TRUST AND EXAMINATION ON THE APPLICAT ION OF FUNDS OR ETHICAL BACKGROUND OF SETTLERS IS NOT CALLED FOR AT THE STAGE OF GRANTING REGISTRATION BY THE AUTHORITIES BELOW. 6. IN THIS REGARD, WE HAVE ALSO GONE THROUGH THE JU DGMENT CITED BY THE LEARNED REPRESENTATIVE OF THE ASSESSEE PASSED BY THE LEARNE D INCOME TAX APPELLATE TRIBUNAL; DELHI BENCH THE RELEVANT PORTION WHEREOF IS AS FOLL OWS: 16. NOW, COMING TO THE POWERS OF THE COMMISSIONER AS TO WHETHER WHILE GRANTING REGISTRATION U/S 12A HE IS REQUIRED TO EXAMINE THE BOOKS OF ACCOUNT ETC. OR HE IS ONLY TO SATISFY HIMSELF REGARDING THE OBJECTS OF THE TRUST AND GENUINENESS OF THE ACTIVITIES OF THE TRUST, WE FIND VARIOUS COURTS HAVE HELD THAT WHILE GRANTING REGISTRATION U/S 12A THE LD. CIT IS REQUIRED TO SEE ONLY THE OBJECTS OF THE ASSE SSEE TRUST/SOCIETY AND NOT TO EXAMINE THE APPLICATION OF INCOME. HE IS NOT REQUIRED TO EXAMIN E WHETHER THE INCOME DERIVED BY THE TRUST IS BEING SPENT FOR CHARITABLE PURPOSES OR THE TRUST IS EARNING PROFIT WHILE GRANTING REGISTRATION. HE IS ONLY REQUIRED TO EXAMINE THE OB JECTS OF THE TRUST. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE O F BHARTIYA KISAN SANGH SEWA NIKETAN (SUPRA). IN THE SAID CASE ALSO THE ASSESSEE TRUST D ID NOT PRODUCE THE BOOKS OF ACCOUNT, BILLS AND VOUCHERS ETC. FOR VERIFICATION OF THE LD. CIT FOR WHICH THE LD. CIT HELD THAT THE ASSESSEE SOCIETY IS NOT CARRYING OUT ANY CHARITABLE ACTIVITIES. DUE TO NON-COMPLIANCE OF ASSESSEE SOCIETY, THE GENUINENESS OF THE ACTIVITIES COULD NOT BE VERIFIED. THE LD. CIT, THEREFORE, RELYING ON VARIOUS DECISIONS INCLUDING T HE DECISIONS WHICH HAVE BEEN RELIED ON BY THE LD. CIT IN THE PRESENT CASE, REJECTED THE CL AIM OF REGISTRATION U/S 12A(1) OF THE I.T. ACT. WHEN THE MATTER TRAVELLED TO THE TRIBUNAL, THE TRIBUNAL ALLOWED THE CLAIM OF REGISTRATION BY HOLDING THAT AT THIS STAGE ON GRANT ING REGISTRATION U/S 12A THE LD. CIT IS REQUIRED TO SEE THE OBJECTS OF THE SOCIETY AND NOT REQUIRED TO EXAMINE THE APPLICATION OF INCOME WHICH WILL HAVE TO BE UNDERTAKEN BY THE ASSE SSING OFFICER ON A YEAR TO YEAR BASIS AFTER THE ASSESSEE FILES THE RETURN OF INCOME CLAIM ING EXEMPTION U/S 11 OF THE I.T. ACT. 17. WE FIND THE HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF FIFTH GENERATION EDUCATION SOCIETY (SUPRA) HAS OBSERVED AS UNDER :- 2. A READ ING OF THE SECTION SHOWS THAT THE REGISTRATION UNDER SECTION 12A IS A PRE-CONDITION F OR AVAILING OF THE BENEFIT UNDER SECTIONS 11 AND 12. SECTION 11 PROVIDES FOR EXEMPTI ON OF INCOME WHICH IS APPLIED FOR CHARITABLE PURPOSES. SECTION 12 IS IN THE NATURE OF AN EXPLANATION TO SECTION 11. BEFORE A PERSON CAN CLAIM THE BENEFIT OF SECTION 11, OR SECT ION 12, AS THE CASE MAY BE, HE MUST OBTAIN REGISTRATION UNDER SECTION 12A. THE APPLICAT ION FOR REGISTRATION UNDER SECTION 12A HAS TO BE MADE IN FORM NO. 10A PRESCRIBED BY RU LE 17A BEFORE THE EXPIRY OF ONE YEAR FROM THE DATE OF CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, WHICHEVER IS LATER. IT HAS TO BE MADE BY THE PERSON IN RECEIPT OF THE INCOME OF THE TRUST. 3. IT IS EVIDENT THAT, AT THIS STAGE, THE COMMISSIONER IS NOT TO EXAMINE THE APPLICATION OF - 6 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR INCOME. ALL THAT HE MAY EXAMINE IS WHETHER THE APPL ICATION IS MADE IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 12A READ WITH RULE 17A AND WHETHER FORM NO. 10A HAS BEEN PROPERLY FILLED UP. HE MAY ALSO SEE WHETHER THE OBJ ECTS OF THE TRUST ARE CHARITABLE OR NOT. AT THIS STAGE, IT IS NOT PROPER TO EXAMINE THE APPL ICATION OF INCOME. 4. THE ORDER IMPUGNED DOES NOT SAY THAT THE OBJECTS OF THE SOCIE TY ARE NOT CHARITABLE IN NATURE ; IT MERELY SAYS THAT THEY ARE GENERAL IN NATURE. JUST B ECAUSE THEY ARE GENERAL, THEY DO NOT CEASE TO BE CHARITABLE. THE COMMISSIONER HAS ALSO O BSERVED THAT NO ACTIVITY HAS BEEN CARRIED ON BY THE SOCIETY. IT IS ALSO NOT THE REQUI REMENT OF SECTION 12A OF THE ACT. NOR HAS SECTION 80GANY RELEVANCE AT THIS STAGE. THE IMPUGNE D ORDER CANNOT, THEREFORE, BE SUSTAINED AND IT IS QUASHED. 18. WE FIND THE HONB LE KARNATAKA HIGH COURT IN THE CASE OF A.S. KUPPARAJI BROTHERS CHARITABLE FOUNDATION TR UST (SUPRA) HAS OBSERVED AS UNDER :- THE CERTIFICATE OF REGISTRATION IS ONLY AN ENABLIN G PROVISION TO CLAIM EXEMPTION. BY MERELY GRANTING A CERTIFICATE INCOME IS NOT EXEMPTE D. THAT IS ONLY A FIRST STAGE TO CLAIM EXEMPTION. THE COMMISSIONER OF APPEALS SHOULD NOT H AVE CONFUSED THESE TWO ASPECTS AND SEEMS TO THINK AS THE TRUSTEES AND HIS FAMILY MEMBE RS ARE TREATING THE PROPERTY AS THEIR OWN AND MISUTILISING THE PROPERTY IT IS NOT A GENUI NE TRUST. WHEN ONCE IT IS ADMITTED THAT IN PURSUANCE OF THE TRUST DEED AND IN TERMS OF THE OBJECTS SET OUT THEREIN, SCHOOLS AND COLLEGES ARE BEING RUN AND EDUCATIONAL INSTITUTIONS ARE BEING RUN AS RIGHTLY HELD BY THE TRIBUNAL, NOTHING MORE REQUIRES TO BE ESTABLISHED T O SHOW THAT THE TRUST IN QUESTION IS A GENUINE TRUST AND THEREFORE, THE ASSESSEE IS ENTITL ED TO THE REGISTRATION UNDER SECTION 12AA OF THE ACT. AS SET OUT ABOVE, EVEN IF THE REGI STRATION IS GRANTED, THE EXEMPTION FROM THE PROVISIONS OF THE INCOME TAX ACT IN PARTICULAR SECTIONS 11 AND 12 IS NOT AUTOMATIC. IT IS ONLY WHEN THE ASSESSEE SATISFIES THE REQUIREMENT OF SECTION 13, HE WOULD BE ELIGIBLE FOR EXEMPTION. THAT IS A MATTER TO BE GONE INTO BY THE ASSESSING AUTHORITY IN RESPECT OF THE RETURNS FILED EVERY YEAR AND IF ACCORDING TO THEM T HERE IS MISAPPROPRIATION OF FUNDS AND IT IS HIT BY SECTION 13 OF THE ACT, CERTAINLY, THEY CA N DENY THE BENEFIT OF EXEMPTION. BUT THAT IS NOT A GROUND TO DENY THE REGISTRATION IN THE INS TANT CASE UNDER SECTION 12AA, WHEN ADMITTEDLY THE TRUST HAS BEEN ESTABLISHED TO RUN SC HOOLS AND COLLEGES FOR IMPARTING EDUCATION, WHICH IS A CHARITABLE PURPOSE. IN THAT V IEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS APPEAL. THE SUBSTANTIAL QUESTION OF L AW FRAMED IN THIS APPEAL IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ACC ORDINGLY, THE APPEAL IS DISMISSED. 19. WE FIND THE HONBLE MADHYA PRADESH HIGH COURT I N THE CASE OF D.P.R. CHARITABLE TRUST (SUPRA) HAS OBSERVED AS UNDER :- 8. SEC. 12A OF THE ACT PRESCRIBES CONDITIONS FOR REGISTRATION OF THE TRUST WHEREAS S. 12AA OF THE AC T PRESCRIBES THE PROCEDURE FOR REGISTRATION. A CAREFUL READING OF THE RELEVANT PRO VISIONS WOULD REVEAL THAT APPLICATION FOR REGISTRATION UNDER S. 12A HAS TO BE MADE IN FOR M NO.10A PRESCRIBED BY R. 17A BEFORE THE EXPIRY OF ONE YEAR FROM THE DATE OF CREATION OF THE TRUST OR ESTABLISHMENT OF THE INSTITUTION WHICHEVER IS LATER. THE APPLICATION HAS TO BE MADE BY A PERSON IN RECEIPT OF INCOME OF THE TRUST. THUS WHILE DEALING WITH THE AP PLICATION FOR REGISTRATION THE CIT HAS TO EXAMINE WHETHER THE APPLICATION IS MADE IN ACCOR DANCE 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 NOWHE RE PROVIDES THAT CIT WHILE CONSIDERING THE APPLICATION FOR REGISTRATION IS ALSO REQUIRED T O EXAMINE WHETHER THE INCOME DERIVED BY THE TRUST IS BEING SPENT FOR CHARITABLE PURPOSES OR THE TRUST IS EARNING PROFIT. THE - 7 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR LANGUAGE EMPLOYED BY THE LEGISLATURE IN S. 12AA ONL Y REQUIRES THAT ACTIVITIES OF THE TRUST OR INSTITUTION MUST BE GENUINE WHICH SHOULD BE IN C ONSONANCE WITH THE OBJECT OF THE TRUST. AT THIS STAGE, THE CIT IS NOT REQUIRED TO EXAMINE T HE APPLICATION OF INCOME. ALL THAT HE MAY EXAMINE IS WHETHER THE APPLICATION IS MADE IN A CCORDANCE WITH THE REQUIREMENTS OF S. 12A R/W R. 17A AND WHETHER FORM NO.10A HAS BEEN PROPERLY FILLED UP. HE HAS ALSO TO SEE WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE OR NOT. OUR VIEW FUNDS SUPPORT FROM THE DIVISION BENCH DECISION OF THE ALLAHABAD HIGH C OURT RENDERED IN THE CASE OF RED ROSE SCHOOL (SUPRA) AND THE DECISIONS IN THE CASE O F NEW LIFE IN CHRIST EVANGELISTIC ASSOCIATION (SUPRA), FIFTH GENERATION EDUCATION SOC IETY (SUPRA) AND SHANTAGAURI RAMNIKLAL TRUST (SUPRA). 9. IN THE BACKDROP OF AFORESAID LEGAL POSITION FACT S OF THE CASE MAY BE SEEN. ADMITTEDLY THE APPLICATION SUBMITTED BY THE RESPONDENT WAS IN CONSONANCE WITH THE PROCEDURAL REQUIREMENT PRESCRIBED IN THIS REGARD. FROM THE TRU ST DEED WHICH WAS FILED BEFORE THE CIT THE OBJECTS OF THE TRUST COULD BE ASCERTAINED. FROM PERUSAL OF CL. (3) OF THE TRUST DEED WE FIND THAT THE OBJECTS OF THE TRUST ARE CHARITABL E IN NATURE AND ARE IN TUNE WITH S. 2(15) OF THE ACT AND, THEREFORE, THE TRIBUNAL RIGHTLY OPI NED THAT THE ORDER OF THE CIT REJECTING THE APPLICATION UNDER S. 12A WAS UNJUSTIFIED. 20. THE VARIOUS OTHER DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IN THE PAPER BO OK ALSO SUPPORT HIS CASE. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT THE LD. CIT WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF REGISTRATION U/S 12A. WE, THEREFORE, SET-ASIDE THE ORDER OF THE LD. CIT AND DIRECT HIM TO ALLOW REGISTRATION U/S 12A OF THE I.T. ACT. 7. WE FIND THAT THE OBJECT OF THE TRUST AND THE GEN UINENESS OF THE ACTIVITIES OF THE TRUST IS THE MAIN CONSIDERATION OF THE LEARNED ITAT IN THE MATTER CITED ABOVE. IN THE INSTANT CASE, THE LD CIT WHILE DEALING WITH THE APP LICATION FOR GRANT OF REGISTRATION OF LIMITING ITS JURISDICTION WITHIN THE ASPECT OF ITS OBJECTS UNNECESSARILY EXCEEDED TO THE ISSUE OF INCOME DERIVED BY THE TRUST SPEND FOR CHARITABLE PURPOSES AND THE PROFIT EARNED BY THE TRUST WHICH IS SUPPOSED TO BE DONE BY THE ASSESSING OFFICER AT THE TIME OF CONSIDERING THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 11 OF T HE ACT IF NEEDED. IT IS RELEVANT TO MENTION THAT NO DEFECT WAS DETECTED BY THE LEARNED CIT IN THE APPLICATION FOR REGISTRATION OF THE TRUST SO PLACED BEFORE IT BY THE ASSESSEE. W E, THEREFORE, FIND NO REASON IN THE ORDER PASSED BY THE LEARNED CIT IN REJECTING THE CLAIM OF REGISTRATION OF THE ASSESSEES TRUST IN THE ABSENCE OF ANY LACUNA OF THE DETAILS SUBMITTED BY THE ASSESSEE WITH THE APPLICATION U/S 12A OF THE ACT. THE ORDER PASSED BY THE LD CIT IS T HEREFORE, QUASHED WITH A FURTHER DIRECTION UPON HIM TO ALLOW SUCH REGISTRATION U/S 1 2AA OF THE ACT. - 8 - ITA NO.261/RJT/2015 CRICKET FOR RAJKOT DISTRICT VS. CIT ASST.YEAR 8. IN THE RESULT, THE ASSESSEES APPEAL IS HEREBY A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 16/11/2018 SD/- SD/- ( WASEEM AHMED ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 16/11/2018 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- II, RAJKOT. 5. , , ! /DR,ITAT, RAJKOT 6. '# $% / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , ! / ITAT, RAJKOT