M/s Tara Ripu Damanpal Trust, Kurukshetra V. CIT (Exemptions), Chandigarh

ITA 309/CHANDI/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2452 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-12-2015
• Assessment Year: misc
• Appeal Filed On: 26-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K R CHHABRA
• Keywords: Charitable institution; Principle of natural justice; Question of law
• Section: 12A; 12AA; 12; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 309/CHD/2015 UNDER SECTION 12AA TARA RIPU DAMANPAL TRUST VS. CIT (EXEMPTION). NARAYAN BHAWAN, CHANDIGARH SALARPUR ROAD, GITA NIKETAN PARISAR KURUKSHETRA PAN NO. AACTT2652F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. K.R. CHHABRA RESPONDENT BY : SH. MANOJ MISHRA DATE OF HEARING : 17/12/2015 DATE OF PRONOUNCEMENT : 07/01/2016 ORDER PER ANNAPURNA MEHROTRA A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY CIT (EXEMPTIONS), CHANDIGARH DATED 16.02.2015, R EFUSING TO GRANT REGISTRATION TO THE ASSESSEE U/S 12AA. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TR UST WAS CREATED AND REGISTERED ON 20.06.2013 VIDE REGISTRATION NO. 2069 OF 2013-14. AN APPLICATION FOR GRANT OF APPROVAL U/S 12AA WAS FILE D IN THE OFFICE OF THE CIT, KARNAL, IN F. NO. 10A ON 12.08.2014. THE APPLI CATION WAS THEREAFTER TRANSFERRED TO THE OFFICE OF CIT(EXEMPTION), CHANDI GARH. LD. CIT, AFTER CONSIDERING THE DOCUMENTS FILED BY THE ASSESSEE, RE FUSED TO GRANT REGISTRATION FOR THE REASON THAT NOT A SINGLE PENNY HAD BEEN SPENT BY THE ASSESSEE TRUST TOWARDS ITS AIMS AND OBJECTS. LD. CI T ALSO FOUND THAT THE ASSESSEE TRUST HAD NEITHER APPLIED 85% OF ITS INCOM E FOR CHARITABLE 2 PURPOSES NOR ACCUMULATED THE SAME AS PER SECTION 11 (2) OF THE INCOME TAX ACT. FURTHER, LD. CIT STATED THAT A REPORT HAD BEEN CALLED FROM THE INCOME TAX OFFICER (EXEMPTIONS), WHO HAD NOT RECOMM ENDED GRANTING REGISTRATION SINCE THE ASSESSEE TRUST HAD FAILED TO FURNISH INFORMATION / DOCUMENTS AS DESIRED. THEREFORE, LD. CIT HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR REGISTRATION U/S 12A OF THE ACT. 3. BEFORE US LD. AR ARGUED THAT THE LD. CIT COULD NOT HAVE REFUSED REGISTRATION FOR THE REASONS STATED. LD. AR SUBMITTED THAT THE APPLICATION FOR REGISTRATION IS REQUIRED TO BE MADE WITHIN ONE YEAR OF CREATION OF THE TRUST OR SOCIETY AND THERE IS NO RE QUIREMENT THAT THE TRUST OR SOCIETY SHOULD HAVE STARTED ALL ITS ENVIS AGED ACTIVITIES IN THE FIRST YEAR ITSELF . ACCORDING TO LD. AR, U/S 12 A / 12AA OF THE ACT, SATISFACTION REGARDING GENUINENESS OF THE ACTIVITIE S OF THE TRUST / SOCIETY IS TO BE SEEN AND THE STAGE FOR APPLICATION OF INCOME IS YET TO ARRIVE I.E. WHEN THE TRUST OR SOCIETY FILES ITS RETURN. LD. AR ARGUED THAT THE LD. CIT HAD TO ONLY CONSIDER WHETHER THE O BJECTS OF THE ASSESSEE TRUST WERE GENUINE OR NOT. LD. AR STATED THAT AS PE R SECTION 12A AND THE INTERPRETATION OF THE SAME BY VARIOUS COURTS, LD. C IT COULD NOT REFUSE REGISTRATION FOR ANY REASONS OTHER THAN THAT STATED IN SECTION 12A. LD. AR PLACED RELIANCE ON THE ORDER OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF SURYA EDUCATIONAL & CHARITABLE TRUST (2013) 355 ITR 280, TO STRENGTHEN HIS ARGUMENT. LD. AR FURTHER STATED THAT NO ADVERSE OBS ERVATIONS HAVE BEEN MADE BY THE LD. CIT REGARDING THE OBJECTS OF THE TR UST. LD. AR ALSO STATED THAT SINCE IT WAS THE FIRST YEAR OF FUNCTIONING OF THE ASSESSEE TRUST NO ACTIVITIES HAD BEEN CARRIED OUT BY IT. THEREFORE LD . AR PLEADED THAT REGISTRATION U/S 12A COULD NOT BE REFUSED FOR NOT C ARRYING OUT THE STATED 3 OBJECTS OF THE TRUST. LD. AR AGAIN PLACED RELIANCE ON THE ORDER OF SURYA EDUCATIONAL TRUST (SUPRA) IN THIS REGARD. FURTHER L D. AR STATED THAT EXAMINATION OF THE FULFILLMENT OF THE CONDITION OF SECTION 11 WAS THE PREROGATIVE OF THE A.O. TO CHECK DURING ASSESSMENT PROCEEDINGS AND COULD NOT BE A CONSIDERED BY THE CIT WHILE GRANTING REGISTRATION U/S 12A. THE LD. AR ALSO STATED THAT REGISTRATION COULD NOT BE REFUSED ON THE RECOMMENDATION OF THE ASSESSING OFFICER WITHOUT DIS CLOSING THE CONTENTS OF THE REPORT CONFRONTING THE SAME TO THE ASSESSEE. THUS THE LD. AR STATED THAT THE LD. CIT HAD ERRED IN NOT GRANTING REGISTRA TION TO THE ASSESSEE TRUST. 4. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER O F THE LD. CIT AND STATED THAT SINCE NO ACTIVITIES IN PURSUANCE TO THE STATED OBJECTS OF THE ASSESSEE TRUST HAD BEEN CARRIED OUT AND FURTHER SIN CE THE ASSESSEE HAD FAILED TO COMPLY WITH THE CONDITION REGARDING APPLI CATION OF INCOME TO THE EXTENT OF 85% OR ACCUMULATION OF THE SAME AS PE R SECTION 11(2), THE REGISTRATION U/S 12A HAD BEEN RIGHTLY REFUSED BY TH E LD. CIT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDER OF THE AUTHORITIES BELOW, AS ALSO THE DOCUMENTS PLACED BEF ORE US. 6. IN THE INSTANT CASE, THE CONTENTION OF THE COMMI SSIONER IN REFUSING TO GRANT REGISTRATION TO THE SOCIETY U/S 1 2A OF THE ACT IS THAT THE SOCIETY HAD NOT CARRIED OUT CHARITABLE ACTIVITI ES AND HAD ALSO NOT APPLIED ITS ACCUMULATED INCOME AS LAID DOWN IN SECTION 11 OF THE ACT AND FURTHER THE ASSESSING OFFICER HAD NOT R ECOMMENDED GRANT OF REGISTRATION SINCE THE ASSESSEE TRUST HAD FAILED TO FURNISH DOCUMENTS / INFORMATION DESIRED. 4 UNDISPUTEDLY THE APPLICATION FOR REGISTRATION HAS B EEN FILED BY THE ASSESSEE TRUST IN THE FIRST YEAR OF ITS COMING INTO EXISTENCE. WE FIND THAT THE ISSUE OF REFUSAL OF REGISTRATION U/S 12A F OR NOT CARRYING OUT THE STATED CHARITABLE ACTIVITIES IN IDENTICAL CIRCU MSTANCES HAS BEEN DEALT WITH BY THE HONBLE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF CIT VS. BKK MEMORIAL TRUST (2013) 29 TAXMANN.COM 286 (HON'BLE HIGH COURT OF PUNJAB & HARYANA), WHEREIN THE HONBL E HIGH COURT HAS HELD AS UNDER:- 6. A PERUSAL OF THE FACTS DEPICTS THAT THE TRUST WAS CREATED ON 23.6.2010 AND APPLICATION UNDER SECTION 12A(1) ( AA) OF THE ACT WAS MOVED ON 19.7.2010 AND THE SAME WAS REJECTE D ON 26.11.2010. THIS COURT IN ITA NO.710 OF 2010-COMMIS SIONER OF INCOME TAX-II, CHANDIGARH VS. M/S SURYA EDUCATIONAL & CHARITABLE TRUST, DECIDED ON 5.10.2011 HAS HELD THA T THE APPLICATION FOR REGISTRATION IS REQUIRED TO BE MADE WITHIN ONE YEAR OF THE CREATION OF THE TRUST AND THERE IS NO R EQUIREMENT THAT THE TRUST OR THE INSTITUTION SHOULD HAVE STARTED AL L ITS ENVISAGED ACTIVITIES IN THE FIRST YEAR ITSELF. UNDER SECTION 12AA OF THE ACT SATISFACTION REGARDING THE GENUINENESS OF THE ACTIV ITIES OF THE TRUST IS TO BE SEEN AND THE STAGE FOR APPLICATION O F INCOME IS YET TO ARRIVE I.E. WHEN SUCH TRUST OR INSTITUTION FILES ITS RETURN. RELEVANT PORTION OF THE JUDGMENT READS AS UNDER:- WE HAVE HEARD LEARNED COUNSEL FOR THE APPELLANT, BUT FIND NO MERIT IN THE PRESENT APPEALS. AS PER SECTIO N 12AA OF THE ACT, AN APPLICATION FOR REGISTRATION OF THE TRUST AND INSTITUTION IS REQUIRED TO BE MADE WITHIN ONE YEAR FROM THE DATE OF CREATION OF THE TRUST OR THE ESTABLISHMENT OF SUCH INSTITUTION. THE PROCEDURE FOR REGISTRATION OF THE TRUST OR INSTITUTION IS PRESCRIBED UNDER SECTION 12AA OF THE ACT. IN TERMS OF CLAUSE (A) OF SECTION 12AA OF THE ACT, THE COMMISSIONER IS TO SATISFY HIMSELF ABOUT THE GENUIN ENESS OF THE ACTIVITIES OF THE TRUST ON SUCH INQUIRIES AS HE MAY DEEM NECESSARY. SUB-SECTION (1A) AND (2) OF SECTION 12AA OF THE ACT, ARE PROCEDURAL IN NATURE, WHEREAS SUB-S ECTION (3) OF SECTION 12AA OF THE ACT, EMPOWERS THE COMMISSIONER TO CANCEL THE REGISTRATION OF THE TRUS T OR INSTITUTION, IF HE IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT CARRIED O UT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION. 5 SECTION 11 OF THE ACT CONTEMPLATES THAT THE INCOME AS SPECIFIED THEREIN SHALL NOT BE INCLUDED IN THE TOTA L INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF TH E INCOME DERIVED FROM THE PROPERTY HELD UNDER THE TRUST WHOL LY FOR CHARITABLE OR RELIGIOUS PURPOSES, WHEREAS SECTION 1 2 OF THE ACT, DEALS WITH THE CONTRIBUTIONS RECEIVED BY THE T RUST OR AN INSTITUTION, ESTABLISHED FOR CHARITABLE AND RELI GIOUS PURPOSES, RECEIVING CONTRIBUTION, SHALL NOT BE AN I NCOME IN TERMS OF SECTION 11 OF THE ACT. THE BENEFIT OF SECT IONS 11 AND 12 OF THE ACT, ARE AVAILABLE ONLY IF SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA OF THE ACT. ON THE OTHER HAND, SECTION 10(23C) OF THE ACT ARE T HE PROVISIONS OF THE ACT IN SUBSTITUTION OF THE EARLIE R PROVISIONS OF SECTION 10(22) OF THE ACT AS TO WHICH INCOME SHA LL NOT BE INCLUDED IN COMPUTING THE TOTAL INCOME OF ANY PE RSON. THEREFORE, THE PROVISIONS OF SECTIONS 11, 12 OR SEC TION 10(23C) OF THE ACT, DEAL WITH THE INCOME OF A TRUST OR OF THE INSTITUTION AND THE CIRCUMSTANCES AS TO WHEN SU CH INCOME IS TO BE EXCLUDED FOR COMPUTING THE TOTAL IN COME, BUT THE BASIS OF SUCH BENEFIT IS THE REGISTRATION U NDER SECTION 12AA OF THE ACT. UNLESS A TRUST OR INSTITUT ION IS REGISTERED UNDER SECTION 12AA OF THE ACT, SUCH TRUS T OR INSTITUTION SHALL NOT BE ENTITLED TO EXCLUDE FROM I TS TOTAL INCOME, DEDUCTIONS OR CONTRIBUTIONS OR FROM OTHER S OURCES. THEREFORE, THE PRINCIPLES LAID DOWN FOR EXCLUDING T HE INCOME FROM CONSIDERATION UNDER SECTION 10(22) NOW 10(23)(C) OR SECTIONS 11 AND 12 ARE NOT APPLICABLE WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THE APPLICATION FOR REGISTRATION I S REQUIRED TO BE MADE WITHIN ONE YEAR OF THE CREATION OF THE TRUST. SECTION 12AA OF THE ACT, REQUIRES SATISF ACTION IN RESPECT OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, WHICH INCLUDES THE ACTIVITIES WHICH THE TRUST IS UN DERTAKING AT PRESENT AND ALSO WHICH IT MAY CONTEMPLATE TO UNDERTAKE. THE INSERTION OF SUBSECTION (3) TO SECTI ON 12AA OF THE ACT, CLARIFIES THE SAID FACT, WHEN IT EMPOWE RS THE COMMISSIONER TO CANCEL THE REGISTRATION IF THE ACTI VITIES OF THE TRUST ARE NOT CARRIED OUT IN ACCORDANCE WITH SU CH OBJECTS. THEREFORE, THE OBJECT OF SECTION 12AA OF THE ACT, IS TO EXAMINE THE GENUINENESS OF THE OBJECTS OF THE TRUST , BUT NOT THE INCOME OF THE TRUST FOR CHARITABLE OR RELIG IOUS PURPOSES. THE STAGE FOR APPLICATION OF INCOME IS YE T TO ARRIVE I.E. WHEN SUCH TRUST OR INSTITUTION FILES IT S RETURN. THEREFORE, WE FIND THAT THE JUDGMENTS REFERRED TO B Y THE LEARNED COUNSEL FOR THE APPELLANT ARE NOT APPLICABL E TO THE FACTS OF THE PRESENT CASE ARISING OUT OF THE QU ESTION OF REGISTRATION OF THE TRUST AND NOT OF ASSESSMENT. IN VIEW OF THE ABOVE, WE DO NOT FIND THAT ANY SUBST ANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THE PRE SENT APPEALS. HENCE, THE SAME ARE DISMISSED. 6 7. THE SAID VIEW HAS BEEN FOLLOWED BY THIS COURT I N ITA NO.881 OF 2010 THE COMMISSIONER OF INCOME-TAX, BATHINDA VS. M /S BABA DEEP SINGH EDUCATIONAL SOCIETY, SCF 23, BHARAT NAGAR, BA THINDA DECIDED ON 13.10.2011 WHEREIN IT WAS HELD AS UNDER:- IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT WOULD BE CLEAR THAT RESPONDENT-SOCIETY WHICH WAS ADMITTEDLY RUNNING A POLYTECHNIC COLLEGE AND THE ACTIVITIES WE RE INTERWOVEN FOR FURTHERING THE PROJECTS AND ACTIVITI ES PERTAINING TO EDUCATION, THE TRIBUNAL RIGHTLY DIREC TED THAT REGISTRATION SHOULD BE GRANTED TO THE RESPONDENT-SO CIETY WITH THE RIDER THAT THE SAME COULD ALWAYS BE CANCEL LED IF IT CAME TO THE NOTICE OF THE CIT THAT THE SOCIETY W AS NOT CARRYING ON THE ACTIVITIES AS PER ITS OBJECTS. THE COMMISSIONER WHILE PROCESSING THE APPLICATION UNDER SECTION 12AA OF THE ACT WAS NOT TO ACT AS AN ASSESS ING AUTHORITY AND THUS, THE TRIBUNAL HAS RIGHTLY ALLOWE D THE APPEAL FILED BY THE SOCIETY IN THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE. 8. ACCORDINGLY, IN VIEW OF THE AFORESAID PRONOUNCE MENTS OF THIS COURT WHICH ARE FULLY APPLICABLE IN THE PRESENT CAS E, THE SUBMISSION OF THE COUNSEL FOR THE REVENUE THAT THE TRUST WAS N OT SET UP FOR CHARITABLE PURPOSES AND IT WAS UTILIZING ITS INCOME NOT FOR THE SAID PURPOSE CANNOT BE EXAMINED AT THIS STAGE AS ONLY OB JECTS OF THE TRUST HAD TO BE CONSIDERED BY THE COMMISSIONER. THE TRUST WAS IN NASCENT STAGE AND WAS YET TO WORK TOWARDS ITS OBJEC TS. NO ERROR COULD BE POINTED OUT IN THE ORDER OF THE TRIBUNAL W ARRANTING INTERFERENCE BY THIS COURT. ACCORDINGLY, NO SUBSTAN TIAL QUESTION OF LAW ARISES FOR DETERMINATION BY THIS COURT AND CONS EQUENTLY, THE APPEAL IS DISMISSED. FROM THE ABOVE, IT IS CLEAR THAT THE OBJECTS OF SEC TION 12AA IS TO EXAMINE THE GENUINENESS OF THE OBJECTS OF THE TRUST OR SOCIETY, BUT NOT THE TOTAL INCOME OR THE TRUST OR SOCIETY AVAILA BLE FOR CHARITABLE PURPOSES. APPLICATION OF INCOME HAS TO BE SEEN AT THE STAGE OF ASSESSMENT WHEN THE TRUST OR SOCIETY FILES ITS RETU RN OF INCOME. IT IS NOT THE CASE OF LD. CIT THAT THE OBJECTS OF SOCIET Y ARE NOT CHARITABLE. FURTHERMORE, IN THE INSTANT CASE THE S OCIETY WAS IN NASCENT STAGE AND IT IS NOT REQUIRED UNDER LAW THAT THE SOCIETY SHOULD HAVE STARTED ALL ITS ENVISAGED ACTIVITIES IN THE FIRST YEAR ITSELF. IN OUR CONSIDERED VIEW, THE DECISION OF THE HON'BL E JURISDICTIONAL 7 HIGH COURT REFERRED TO ABOVE IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. RESPECTFULLY, FOLLOWING THE JUDGE MENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V B. K.K. MEMORIAL TRUST (SUPRA), WE HOLD THAT THE COMMISSIONER OF INCOME TA X COULD NOT HAVE REFUSED GRANT REGISTRATION U/S 12A / 12AA OF THE ACT TO THE ASSESSEE SOCIETY FOR THE REASON THAT IT HAD NOT CAR RIED OUT ANY CHARITABLE ACTIVITIES. FURTHER WE FIND THAT THE LD. CIT HAD REFUSED REGIST RATION ALSO FOR THE REASON THAT THE ASSESSEE HAD NOT APPLIED 85% OF ITS RECEIPTS FOR CHARITABLE PURPOSE NOR ACCUMULATED THE SAME FOR APP LICATION IN FUTURE YEARS, AS PER THE PROVISION OF SECTION 11 OF THE ACT. THE PROVISION OF SECTION 12AA ARE VERY CLEAR, AS PE R WHICH THE ONLY MANDATE GIVEN TO THE CIT BEFORE GRANTING REGISTRATI ON IS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE OBJECTS OF THE TRUST AND THE ACTIVITIES OF THE TRUST. LD. CIT HAS ONLY TO SEE WH ETHER THE OBJECTS OF THE TRUST ARE CHARITABLE OR NOT AND THE ACTIVITIES ARE GENUINE. THE PURPOSE BEING TO ESTABLISH THE IDENTITY OF THE TRUS T TO ENABLE IT TO CLAIM THE BENEFITS U/S 11 & 12 OF THE ACT. THE FULF ILLMENT OF CONDITIONS OF SECTION 11 IS A SEPARATE ISSUE WHICH IS TO BE CO NSIDERED WHEN RETURN IS FILED BY THE ASSESSEE AND EXAMINED BY THE AO. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF HARDAYAL CHARIT ABLE & EDUCATIONAL TRUST VS. CIT(2013) 355 ITR 534 HELD TH AT THE QUESTION OF EXEMPTION OF APPLICATION OF INCOME WAS AN ISSUE TO BE CONSIDERED ON EXAMINING THE CLAIM OF THE ASSESSEE IN THE RETUR N FILED, AND COULD NOT BE A CONSIDERATION FOR GRANTING/REFUSING TO GRA NT REGISTRATION U/S 12AA. THE HONBLE HIGH COURT HELD AT PARA 22 OF ITS ORDER AS FOLLOWS: 8 22. THE QUESTION OF THE EXEMPTION OF THE APPLICATI ON OF INCOME RECEIVED BY WAY OF DONATION, IS A SEPARATE ISSUE AND WHICH M AY BE REQUIRED TO BE CONSIDERED, WHEN THE RETURN IS FILED BY THE TRUST A ND IS EXAMINED BY THE INCOME-TAX OFFICER. THE QUESTION AS TO WHETHER THE DONATIONS BY THE SOCIETIES WAS THE EXPENDITURE OF THE TRUST FOR CHAR ITABLE AND RELIGIOUS PURPOSES WILL BE EXAMINED AT THE TIME OF EXAMINING THE RETURN. SIMILAR VIEW HAS ALSO BEEN HELD BY THE RAJASTHAN HI GH COURT IN THE CASE OF CIT VS. VIJAY VARGIYA VANI CHARITABLE TRUST (2014) 369 ITR 360 (RAJ) WHEREIN IT HELD AS FOLLOWS: 8. IN OUR VIEW, THE OBJECT OF SECTION 12AA IS TO E XAMINE GENUINENESS OF THE OBJECTS OF THE TRUST BUT NOT THE INCOME OF THE TRUS T FOR CHARITABLE OR RELIGIOUS PURPOSE. THE COMMISSIONER CANNOT SIT IN THE CHAIR O F ASSESSING OFFICER TO LOOK INTO AMOUNT SPENT ON CHARITABLE ACTIVITIES AT THE TIME O F CREATION OF THE TRUST. THE STAGE FOR REVIEWING THE APPLICATION OF INCOME HAS N OT ARRIVED WHEN SUCH TRUST OR INSTITUTION FILES APPLICATION FOR REGISTRATION OF T HE TRUST/SOCIETY. 9. IN OUR VIEW, THE TRUST CAN MOVE THE APPLICATION IMMEDIATELY AT THE TIME OF FORMATION THEN THERE IS NO PROHIBITION UNDER THE AC T SEEKING REGISTRATION. IN OUR VIEW AS OBSERVED EARLIER THE ONLY THING TO BE LOOKE D INTO AT THE TIME OF GRANTING OF REGISTRATION IS THAT THE OBJECT OF THE TRUST FOR WH ICH IT WAS FORMED HAVE TO BE SEEN AND EXAMINED,THE CIT'S SATISFACTION ABOUT GENUINENE SS OF THE ACTIVITIES OF THE TRUST IS NOT A CRITERIA AS THE TRUST IS YET TO COMM ENCE ACTIVITIES. ASKING ABOUT CHARITABLE ACTIVITIES AT THE NASCENT STAGE WOULD AM OUNT TO PUTTING A CART BEFORE THE HORSE. FOLLOWING THE ABOVE DECISIONS, WE HOLD THAT THE LD. CIT COULD NOT HAVE REFUSED REGISTRATION TO THE ASSESSEE U/S 12A F OR NOT COMPLYING WITH THE CONDITION OF APPLICATION / ACCUMULATION OF INCOME AS SPECIFIED IN SECTION 11 OF THE ACT. FURTHER WE FIND THAT THE LD. CIT HAS REFUSED REGIST RATION ON THE RECOMMENDATION OF THE AO, WITHOUT DISCLOSING THE CO MPLETE CONTENTS OF THE REPORT AND WITHOUT CONFRONTING THE SAME TO THE ASSESSEE. THIS WE HOLD IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. THE HONBLE APEX COURT IN THE CASE OF KISHINCHAND CHELL ARAM VS. CIT (1980) 125 ITR 713, HAS HELD THAT NO EVIDENCE CAN B E USED AGAINST THE ASSESSEE WITHOUT CONFRONTING THE SAME TO IT. TH E LD. CIT COULD 9 NOT THEREFORE HAVE REFUSED REGISTRATION TO THE ASSE SSEE ON THE BASIS OF RECOMMENDATION OF THE AO. 7. IN VIEW OF THE ABOVE WE DIRECT THE COMMISSIONER OF INCOME TAX TO GRANT REGISTRATION TO THE ASSESSEE SOCIETY U/S 1 2AA OF THE ACT. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2016 SD/- SD/- (H.L. KARWA) (ANNAPURNA MEHROTRA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 07/01/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR