M/s. Gurusikh Education Society, New Delhi V. CIT, Dehradun

ITA 3615/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65914 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 10-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 12A; 12AA; 12

Judgement Text

ITA NO.3615/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `C NEW DELHI BEFORE SHRI A.N. PAHUJA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.3615/DEL/2012 ASSESSMENT YEAR : NA GURUSIKH EDUCATION SOCIETY, VS COMMISSIONER OF INCOME TAX, C/O M/S RRA TAXINDIA, DEHRADUN . D-28, SOUTH EXTENSION PART-1, NEW DELHI. (PAN: AAKFG1452E) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI TANEJA RESPONDENT BY : SHRI SATPAL SINGH, SR.DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX, DEHRADUN DATED 31.05.20 12 U/S 12AA (1)(B)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT T HE ACT). 2. THE MAIN GROUNDS IN THIS APPEAL READ AS UNDER:- 1 . THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE LD. CIT HAS ERRED IN LAW AND ON FACTS I N REJECTING THE APPLICATION OF APPELLANT SOCIETY U/S 12AA BY OBSERVING THAT ASSESSEE HAS NOT UTILIZED THE FUNDS FOR CHARITABLE PURPOSES FOR THE SOCIETY AND HAS ERRED I N NOT GRANTING THE BENEFIT OF REGISTRATION U/S 12AA. ITA NO.3615/DEL/2012 2 2. THAT IN ANY VIEW OF THE MATTER AND IN ANY CAS E, ACTION OF LD. CIT IN REJECTING THE REGISTRATION UND ER SECTION 12AA IS BAD IN LAW AND AGAINST THE FACTS AN D CIRCUMSTANCES OF THE CASE AND IS CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE AS THE IMPUGNED ORDER HAS BEEN PASSED WITHOUT GRANTING ADEQUATE OPPORTUNITY O F HEARING AND BY RECORDING INCORRECT FACTS AND FINDIN GS AND THE APPELLANT SOCIETY OUGHT TO HAVE BEEN GRANTE D THE BENEFIT OF REGISTRATION UNDER THE LAW. 3. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MO DIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APPEAL ARE THAT THE ASSESSEE FILED AN APPLICATION BEFORE CIT, DEHRADUN FOR REGIS TRATION U/S 12AA OF THE ACT ON 24.11.2011 ALONG WITH SOME ENCLOSURES. THE COMMISSIONER OF INCOME TAX, DEHRADUN REQUIRED THE APPLICANT TO FURN ISH SPECIFIC INFORMATION/DETAILS AND THE APPLICANT FILED ITS REP LY ON 20.12.2011. THE COMMISSIONER OF INCOME TAX OBSERVED THAT THE APPLIC ANT SOCIETY HAS NOT PRODUCED ANY EVIDENCE AND ACCOUNTS TO SHOW THE REQU ISITE EXPENDITURE ON CHARITY IN AY 2011-12. HE ALSO OBSERVED THAT THE A PPLICANT SOCIETY HAS ONLY APPLIED PAYMENT OF COLLEGE FEES OF RS.53,285/- FOR CHARITABLE PURPOSE AS AGAINST THE RECEIPT AMOUNT OF RS. 4,19,507. THE COMMISSIONER OF INCOME TAX FINALLY HELD THAT THE APPLICANT SOCIETY HAS FAILED TO MEET THE REQUIRED CONDITIONS NECESSARY TO BE SPECIFIED FOR THE REGISTRATION AND HE REJECTED THE APPLICATION FOR REGISTRATION ITA NO.3615/DEL/2012 3 SOUGHT BY THE APPLICANT SOCIETY. NOW, THE APPLICAN T SOCIETY IS BEFORE THIS TRIBUNAL WITH THIS APPEAL. GROUND NO. 1 & 2 4. THE COUNSEL FOR THE APPELLANT SOCIETY SUBMITTED THAT THE COMMISSIONER OF INCOME TAX WAS NOT JUSTIFIED IN OBSERVING THAT T HE APPLICANT SOCIETY HAS NOT UTILIZED THE FUNDS FOR CHARITABLE PURPOSES AND HE GROSSLY ERRED IN NOT GRANTING THE BENEFIT OF REGISTRATION U/S 12AA OF TH E ACT. LD. COUNSEL ALSO SUBMITTED THAT THE ACTION OF ASSESSEE IN REJECTING REGISTRATION UNDER SECTION 12AA IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUM STANCES OF THE CASE AND ALSO CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE BECAUSE THE IMPUGNED ORDER HAS BEEN PASSED WITHOUT AFFORDING ADEQUATE OPPORTUN ITY OF HEARING TO THE APPLICANT SOCIETY. HE ALSO SUBMITTED THAT THE COMM ISSIONER OF INCOME TAX REJECTED THE APPLICATION BY RECORDING INCORRECT AND IRRELEVANT FACTS AND FINDINGS AND THE APPELLANT SOCIETY OUGHT TO HAVE BE EN GRANTED REQUIRED REGISTRATION UNDER THE LAW. THE COUNSEL FOR THE AP PELLANT SOCIETY RELIED ON THE RECENT JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF DIT VS FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCA TION CENTRE IN ITA NO.1687/2010 DATED 16.08.2012 WHEREIN IT WAS HELD AS UNDER:- 9. THE PROVISION IN THIS CASE I.E. SECTION-12A ST ATES THAT WHEN A TRUST IS DESIROUS OF GETTING ITSELF REGISTER ED AS CHARITABLE, IT HAS TO APPROACH THE COMMISSIONER UND ER SECTION-12AA. THE POWERS OF THE COMMISSIONER TO REG ISTER ITA NO.3615/DEL/2012 4 OR REFUSE THE APPLICATION ARE EXPRESSLY SPELT OUT I N SECTION- 12AA ITSELF. RULE-12AA (B) READS AS FOLLOWS: SECTION 12AA. PROCEDURE FOR REGISTRATION (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) OF SECTION 12A, SHALL - (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THI NKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GEN UINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY A LSO MAKE SUCH A INQUIRIES AS HE MAY DEEM NECESSARY IN THIS B EHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION GENUINENESS OF ITS ACTIVITIES, HE - (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTIT UTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASON ABLE OPPORTUNITY OF BEING HEARD. (1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF COMMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDE R CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE S TAGE AT WHICH THEY WERE ON THAT DAY. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFOR E THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN W HICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) OF SECTIO N 12A. 10. FACIALLY, THE ABOVE PROVISION WOULD SUGGEST THA T THERE ARE NO RESTRICTIONS OF THE KIND WHICH THE REVENUE I S READING INTO IN THIS CASE. IN OTHER WORDS, THE STAT UTE DOES ITA NO.3615/DEL/2012 5 NOT PROHIBIT OR ENJOIN THE COMMISSIONER FROM REGIST ERING TRUST SOLELY BASED ON ITS OBJECTS, WITHOUT ANY ACTI VITY, IN THE CASE OF A NEWLY REGISTERED TRUST. THE STATUTE D OES NOT PRESCRIBE A WAITING PERIOD, FOR A TRUST TO QUALIFY ITSELF FOR REGISTRATION. 11. IF THE REVENUES CONTENTIONS ARE CORRECT THEN, NECESSARILY, A CONDITION WOULD HAVE TO BE READ IN T O THE PROVISION THAT THE COMMISSIONER SHOULD BE SATISFIED THAT THE TRUST IS IN FACT ENGAGED IN CHARITABLE ACTIVITI ES WHICH WOULD IN TURN INJECT CONSIDERABLE DEAL OF SUBJECTIV ITY. IT IS QUITE POSSIBLE THAT IF SUCH FLEXIBILITY IS INTRODUC ED, IT WOULD BE SUSCEPTIBLE TO VARIED INTERPRETATION BY THE DIFF ERENT AUTHORITIES, IN THAT SOME WOULD BE SATISFIED WITH A CTIVITY OF FEW MONTHS, WHILE OTHERS MAY WISH TO EXAMINE THE ACTIVITIES OF THE ORGANIZATION FOR LONGER TIME. IN THIS VIEW OF THE MATTER, THIS COURT IS PERSUADED TO FOLLOW TH E INTERPRETATION GIVEN TO SECTION-12AA BY THE KARNATA KA HIGH COURT IN DIRECTOR OF INCOME TAX (EXEMPTIONS) V . MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA). 12. FOR THE ABOVE REASONS, THE COURT ANSWERS THE QU ESTION OF LAW IN FAVOUR OF THE ASSESSEE AND AGAINST THE RE VENUE. THE APPEAL IS ACCORDINGLY DISMISSED. 5. REPLYING TO THE ABOVE SUBMISSIONS, THE DR SUBMIT TED THAT THE APPLICANT CHARITABLE TRUST HAS TO SHOW THAT THE FUN DS AND DONATIONS RECEIVED HAVE BEEN UTILIZED FOR CHARITABLE PURPOSE OF THE SO CIETY BUT THE COMMISSIONER OF INCOME TAX OBSERVED THAT THE SOCIET Y HAS APPLIED ONLY 12.7% OF TOTAL RECEIPT FOR CHARITABLE PURPOSE. THE DR ALSO SUBMITTED THAT FOR REGISTRATION U/S 12AA OF THE ACT, THE APPLICANT HAS TO SHOW THAT THE OBJECT OF THE APPLICANT SOCIETY OR TRUST IS CHARITABLE AND TH E FUNDS HAVE BEEN UTILIZED TO ITA NO.3615/DEL/2012 6 MEET THE OBJECTIVES OF THE APPLICANT SOCIETY OR TRU ST AND FOR CHARITABLE PURPOSES. THE DR SUPPORTED THE IMPUGNED ORDER. 6. ON CAREFUL CONSIDERATION OF THE SUBMISSIONS OF B OTH THE PARTIES AND PERUSAL OF THE RECORD BEFORE US, WE OBSERVE THAT TH E APPLICANT SOCIETY WAS ESTABLISHED ON 17.01.2011 AND THE APPLICATION FOR R EGISTRATION U/S 12AA OF THE ACT WAS SUBMITTED ON 24.11.2011. WE ALSO OBSER VE THAT AS PER MEMORANDUM OF ASSOCIATION CLAUSE (III) ON PAGE 5 OF THE PAPER BOOK, THE AIMS AND OBJECTIVES OF THE SOCIETY ARE AS UNDER:- AIMS AND OBJECTIVES OF THE SOCIETY WELFARE OF POOR AND NEEDY PERSONS, STUDENTS, ORPHANS, WIDOWS AND DESTITUTES ETC. IRRESPECTIVE OF CASTE, CREED AND RELIGION WITH MORE EMPHASIS ON EDUCATION . TO COOPERATE, JOIN HANDS OR ASSOCIATE WITH OR ASSI ST ANY OTHER ORGANIZATION OR SOCIETY OR BODY OF PERSON S FOR FURTHERANCE OF THE AIMS AND OBJECTIVES OF THE SOCIE TY OR PURPOSES WHICH ARE CONDUCIVE OF THE SAME. TO CARRY OUT ALL SUCH FUNCTIONS, AS MAY BE CONDUCI VE TO THE AIMS AND OBJECTIVES OF SOCIETY. ALL THE EARNINGS, INCLUDING MOVEABLE OR IMMOVABLE PROPERTIES OF THE SOCIETY SHALL BE SOLELY UTILIZED AND APPLIED TOWARDS THE PROMOTION OF ITS AIMS AND OBJEC TIVES ONLY AS SET FORTH IN THE MEMORANDUM OF ASSOCIATION NO PORTION THEREOF SHALL BE PAID OR TRANSFERRED DIRECT LY OR INDIRECTLY BY WAY OF DIVIDENDS, BONUS, PROFITS OR I N ANY MANNER WHATSOEVER TO THE PRESENT OR PAST MEMBERS OF THE COUNCIL OR TO ANY PERSON CLAIMING THROUGH ANY MEMBE R OF THE SOCIETY SHALL HAVE ANY PERSONAL CLAIM ON ANY MO VEABLE ITA NO.3615/DEL/2012 7 OR IMMOVABLE PROPERTIES OF THE SOCIETY OR MAKE ANY PROFITS, WHATSOEVER, BY VIRTUE OF HIS MEMBERSHIP. 7. THE DR HAS NOT DISPUTED THE FACT THAT THE ABOVE AIMS AND OBJECTIVES OF THE SOCIETY AS MENTIONED HEREINABOVE ARE PURELY CHA RITABLE AND FOR THE WELFARE OF POOR AND NEEDY PERSONS, STUDENTS, ORPHAN S, WIDOWS AND DESTITUTES ETC. IRRESPECTIVE OF THEIR CASTE, CREED AND RELIGIO N WITH AN EMPHASIS ON EDUCATION. THE DR HAS ALSO NOT DISPUTED THE FACT T HAT AFTER CREATION OF SOCIETY ON 17.12.2011 IN THE FINANCIAL YEAR 31.3.20 11, THE SOCIETY RECEIVED AMOUNT OF RS.4,19,507 AND MADE AN EXPENDITURE ON PA YMENT OF COLLEGE FEES TO THE OBJECTIVE BENEFICIARIES OF RS.53,285/-. IN VIEW OF ABOVE, WE OBSERVE THAT THE APPLICANT SOCIETY WAS CREATED FOR CHARITAB LE PURPOSE AND AFTER ITS CREATION ON 17.1.2011 UPTO 31.3.2011, WITHIN A SHOR T SPAN OF TIME, THE SOCIETY MADE AN EXPENDITURE AS PAYMENT OF COLLEGE F EES TO THE NEEDY STUDENTS AND WE ARE UNABLE TO SEE ANY EXPENDITURE O UT OF AMBIT OF AIMS AND OBJECTS OF THE SOCIETY. 8. IN RECENT JUDGMENT PASSED BY THE HONBLE PUNJAB & HARYANA COURT IN THE CASE OF O.P. JINDAL GLOBAL UNIVERSITY VS CCIT, PANCHKULA IN CWP NO. 6171/2010 DATED 11.11.2011, THE HONBLE HIGH COURT WAS PLEASED TO OBSERVE THAT WHILE DECIDING THE APPLICATION OF REGI STRATION U/S 12AA OF THE ACT, OBJECTIVES OF THE TRUST IS TO BE SEEN. ITA NO.3615/DEL/2012 8 9. THE HONBLE KARNATAKA HIGH COURT IN A RECENT JUD GEMENT PASSED IN THE CASE OF DIT(E) VS MEENAKSHI AMMA ENDOWMENT TRUS T IN ITA NO. 152/2010 DATED 10.11.2010 OBSERVED IN PARA 6 OF THE JUDGMENT THAT A TRUST COULD BE FORMED TODAY AND WITHIN A WEEK REGISTRATIO N U/S 12A OF THE ACT COULD BE SOUGHT, AS THERE IS NO PROHIBITION UNDER T HE ACT SEEKING SUCH REGISTRATION IMMEDIATELY AFTER CREATION OF THE TRUS T. ACTIVITIES OF THE TRUST HAVE TO BE CONSIDERED IF SUCH REGISTRATION IS SOUGH T MUCH LATER THAN THE FORMATION OF THE TRUST OR AFTER EXPIRY OF THE EARLI ER REGISTRATION GRANTED IN FAVOUR OF THE TRUST. 10. IN THE ABOVE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTIONS) VS MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA) , THEIR LORDSHIPS HELD AS UNDER:- '4. THE TRIBUNAL TAKING INTO CONSIDERATION THE LAW LAID DOWN BY THE DIVISION BENCH OF THIS COURT IN SANJEEV AMMA HANUMANTHE GOWDA CHARITABLE TRUST VS. DIRECTOR OF I T (EXEMPTION) (2006) 203 CTR (KAR) 533 : (2006) 285 I TR 327 (KAR) HELD THAT DEPENDING UPON THE FACTS AND CIRCUMSTANCES, THE CONCERNED AUTHORITY HAS TO LOOK TO THE OBJECTS AND ALSO THE ACTIVITIES OF THE TRUST IN ORD ER TO CONSIDER THE APPLICATION FOR REGISTRATION UNDER S.1 2A OF THE ACT AND ACCORDINGLY ALLOWED THE APPEAL BY ORDER DT. 20TH NOV., 2009 AND DIRECTED THE DIRECTOR OF IT (EXEMPTI ONS) TO GRANT RECOGNITION TO THE TRUST IF OTHER CONDITIONS ARE SATISFIED. ITA NO.3615/DEL/2012 9 5. ON PERUSAL OF RECORDS WE NOTE THAT THE TRUST WAS FORMED ON 231''' JAN., 2008 AND WITHIN A PERIOD OF NINE MO NTHS THEY HAD FILED AN APPLICATION UNDER S.12A FOR ISSUA NCE OF THE REGISTRATION CLAIMING EXEMPTION. THE FACT THAT THE CORPUS OF THE TRUST IS NOTHING BUT THE CONTRIBUTION OF RS. 1,000 BY EACH OF THE TRUSTEES AS CORPUS FUND GOES T O SHOW THAT THE TRUSTEES WERE CONTRIBUTING THE FUNDS BY TH EMSELVES IN A HUMBLE WAY AND WERE INTENDING TO COMMENCE CHARITABLE ACTIVITIES. IT IS NOT EVEN THE CASE OF T HE REVENUE THAT BY THE TIME THE APPLICATION OF THE ASSESSEE CA ME TO THE CONSIDERED BY THEM, THE ASSESSEE HAD COLLECTED LOTS OF DONATIONS FOR THE ACTIVITIES OF THE TRUST. ON THE O THER HAND THE GRIEVANCE OF THE CONCERNED AUTHORITIES SEEMS TO BE THAT THERE WAS NO ACTIVITY WHICH COULD BE TERMED AS CHAR ITABLE AS PER THE DETAILS FURNISHED BY THE ASSESSEE, THERE FORE. SUCH REGISTRATION COULD NOT BE GRANTED. WHEN THE TRUST I TSELF WAS FORMED IN JANUARY 2008 WITH THE MONEY AVAILABLE WIT H THE TRUST, ONE CANNOT EXPECT THEM TO DO ACTIVITY OF CHA RITY IMMEDIATELY AND BECAUSE OF THAT SITUATION THE AUTHO RITY CANNOT COME TO A CONCLUSION THAT TRUST WAS NOT INTE NDING TO DO ANY ACTIVITY OF CHARITY. IN SUCH A SITUATION THE OBJECTS OF THE TRUST HAVE TO BE TAKEN INTO CONSIDERATION BY TH E AUTHORITY AND THE OBJECTS OF THE TRUST COULD BE REA D FROM THE TRUST DEED ITSELF. IN THE SUBSEQUENT RETURNS FI LED BY THE TRUST, IF THE REVENUE COMES ACROSS THAT FACTUALLY T RUST HAS NOT CONDUCTED ANY CHARITABLE ACTIVITIES, IT IS ALWA YS OPEN TO THE AUTHORITIES CONCERNED TO WITHDRAW THE REGISTRAT ION ALREADY GRANTED OR CANCEL THE SAID REGISTRATION UND ER S.12AA (3) OF THE ACT. 11. THE ASSESSEE HAS ALSO RELIED ON THE RECENT JUDG EMENT OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF D IT VS FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE IN ITA NO.-1687/2010 VIDE DATED 16.08.2012 (SUPRA) WHEREIN THEIR LORDSHI P HELD THAT THE STATUE DOES NOT PROHIBIT OR ENJOIN THE COMMISSIONER FROM R EGISTERING TRUST SOLELY ITA NO.3615/DEL/2012 10 BASED ON ITS OBJECTS WITHOUT ANY ACTIVITY, IN CASE OF A NEWLY CREATED TRUST. IT WAS ALSO HELD THAT THE STATUE DOES NOT PRESCRIBE A WAITING PERIOD FOR A TRUST TO QUALIFY ITSELF FOR REGISTRATION. FINALLY, THEIR LO RDSHIP FOLLOWED THE VIEW AND INTERPRETATION OF HONBLE KARNATAKA HIGH COURT GIVE N TO SECTION 12AA OF THE ACT IN THE CASE OF DIT(E) VS MEENAKSHI AMMA END OWMENT TRUST (SUPRA). 12. IN THE PRESENT CASE, WHERE THE TRUST HAS APPROA CHED FOR REGISTRATION TO THE AUTHORITIES WITHIN A FEW MONTHS OF ITS CREATION OR FORMATION, THE ABOVE MENTIONED CRITERIA, NAMELY THE OBJECTS OF THE TRUST FOR WHICH IT WAS FORMED WILL HAVE TO BE EXAMINED BY THE REGISTRATION GRANTI NG AUTHORITIES. THE REGISTRATION AUTHORITY SHOULD CONSIDER THE GENUINEN ESS, AIMS AND OBJECTIVES OF THE APPELLANT SOCIETY THAT THE APPLICANT IS SEEK ING REGISTRATION U/S 12AA OF THE ACT WITH A CHARITABLE OBJECTIVE. AT THIS STAGE , THE COMMENCEMENT OF CHARITABLE ACTIVITIES CANNOT BE A CRITERIA SINCE TH ESE ARE YET TO COMMENCE. IN THE PRESENT CASE, THE COMMISSIONER OF INCOME TAX OB SERVED THAT THE APPLICANT SOCIETY MADE AN EXPENDITURE OF RS.53,285 THAT WAS 12.7% OF THE TOTAL RECEIPT AND REST OF THE AMOUNT WAS NOT UTILIZ ED FOR CHARITABLE PURPOSE AND IT WAS KEPT IN A BANK UNUTILIZED. ON BARE READ ING OF THE IMPUGNED ORDER, WE OBSERVE THAT THE COMMISSIONER OF INCOME TAX REJE CTED THE APPLICATION OF ITA NO.3615/DEL/2012 11 REGISTRATION WITH AN OBSERVATION THAT THE APPLICANT SOCIETY HAS NOT UTILIZED THE RECEIVED AMOUNT FOR CHARITABLE PURPOSES. 13. ACCORDINGLY, ON THE BASIS OF ABOVE DISCUSSION, WE ARE OF THE OPINION THAT THE COMMISSIONER OF INCOME TAX, DEHRADUN WAS N OT JUSTIFIED IN REJECTING THE APPLICATION ON THE BASIS THAT THE APP LICANT SOCIETY HAD NOT UTILIZED OR APPLIED ITS COMPLETE FUNDS OR RECEIPTS FOR CHARITABLE PURPOSES. AT THE COST OF REPETITION, WE HOLD THAT REGISTRATION C ANNOT BE DENIED MERELY ON THE GROUND THAT FUNDS HAVE NOT BEEN UTILIZED OR APP LIED FOR CHARITABLE PURPOSES. 14. AT THE SAME TIME, WE ALSO OBSERVE THAT THE COMM ISSIONER OF INCOME TAX WAS CONSIDERING THE FINANCIAL STATEMENTS FOR TH E PERIOD ENDING 31.3.2011 AND THE SOCIETY WAS CREATED ONLY TWO MONT HS AND SOME DAYS BEFORE I.E. 17.1.2011, THEREFORE, WE OBSERVE THAT T HE COMMISSIONER OF INCOME TAX CONSIDERED THE IRRELEVANT AND INCORRECT FACTS AND HIS FINDINGS ARE NOT SUSTAINABLE. WE ALSO OBSERVE THAT THE COMMISSI ONER OF INCOME TAX HAS NOT EXPRESSED ANY DOUBT ABOUT THE CHARITABLE NATURE OF THE ACTIVITIES OF THE APPLICANT SOCIETY. 15. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE IMPUGNED ORDER IS NOT SUSTAINABLE AND DESERVES TO BE SET ASIDE AND WE SET ASIDE THE SAME. ACCORDINGLY, THIS APPEAL OF THE APPLICANT SOCIETY I S ALLOWED WITH A DIRECTION ITA NO.3615/DEL/2012 12 TO COMMISSIONER OF INCOME TAX, DEHRADUN TO GRANT RE GISTRATION U/S 12AA OF THE ACT TO THE APPLICANT SOCIETY. 16. IN THE RESULT, THE APPEAL IS ALLOWED WITH AFORE MENTIONED DIRECTIONS TO THE COMMISSIONER OF INCOME TAX, DEHRADUN. ORDER PRONOUNCED IN THE OPEN COURT ON 5.12.2012. SD/- SD/- (A.N. PAHUJA) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 5 TH DECEMBER 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR