Care and Share Welfare Society, Ludhiana V. CIT, (Exemptions), Chandigarh

ITA 404/ASR/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0942 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 30-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHA RANI SINGH LD
• Assessee Lawyers: SANJEEV JA IN LD; S K MUKHI ABH AY SETHI LD
• Keywords: Opportunity of being heard; Competent authority
• Section: 12A; 12AA; 201; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBU NAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.404(ASR)/2019 ASSESSMENT YEAR:2017-18 CARE & SHARE WELFARE SOCIETY C/O INTERNATIONAL MARKETING CORPORATION, GURU NANAK DEV BHAWAN, NEAR BHARAT NAGAR CHOWK, LUDHIANA. [PAN:AACAC 6608D] VS. CIT(EXEMPTIONS), CENTRAL REVENUE BUILDING, SECTOR-17, CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.K.MUKHI, ABH AY SETHI, (LD. ADV. & SANJEEV JA IN (LD. CA) RESPONDENT BY: SMT. ABHA RANI SINGH (LD. CIT-DR) DATE OF HEARING: 24.07.2019 DATE OF PRONOUNCEMENT: 03.09.2019 ORDER PER N.K.CHOUDHRY, JM: THE ASSESSEE SOCIETY HAS FILED THIS APPEAL AGAINST THE ORDER DATED 30/04/2019 IMPUGNED HEREIN PASSED BY THE LD. CIT(EXEMPTIONS), CHANDIGARH WHEREBY THE LD. CIT(EXE MPTIONS) REJECTED THE APPLICATION FILED U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT AN APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT WAS FILED BY THE ASSESSEE SOCIETY BEFORE THE LD. CIT(E) ON DATED 10.10.2018 BY DISCLOSING 2 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) THE FACTS THAT THE ASSESSEE SOCIETY IS AN ONGOING ENTITY SI NCE 19 TH AUGUST, 2016 AND HAVING FOLLOWING AIMS AND OBJECTS. TO OPEN EDUCATIONAL/MEDICAL AND RESEARCH INSTITUTIONS/HOSPITALS FOR THE HEALTH AND WELFARE O F MANKIND, HOSPITAL WILL BE CHARITABLE ONLY AND NOT FOR COMME RCIAL GAINS, TO IMPART EDUCATION FOR ALL CLASSES PARTICULARLY VO CATIONAL EDUCATION BY OPENING SCHOOLS AND COLLEGES/MEDICAL O R RESEARCH CENTERS/INSTITUTES, TO GIVE GRANT AND ECON OMIC ASSISTANCE FOR THE PURSUIT OF HIGHER EDUCATION TO T HE NEEDY, POOR AND DESERVING STUDENTS. THE SOCIETY WILL HONOU R THE BRILLIANT STUDENTS AT NATIONAL AND INTERNATIONAL LE VELS WHO HAVE DISTINGUISHED THEMSELVES IN ANY FILED PARTICULARLY EDUCATION, TO OPEN BRANCHES OF THE SOCIETY AT THE VILLAGE, TEHSIL , DISTRICT, REGIONAL, STATE, NATIONAL AND INTERNATIONAL LEVELS AND TO GET THEM AFFILIATED WITH THE REQUIRED AUTHORITIES. WHILE CONSIDERING THE APPLICATION OF THE ASSESSEE SOCIETY, VIDE QUESTIONNAIRE DATED 01.02.2019 AN OPPORTUNITY OF PERSONAL HEARING WAS ACCORDED TO THE ASSESSEE SOCIETY WITH A REQUEST TO PROVIDE CLARIFICATIONS TO QUERIES RAISED ON 12.02.2019 AS MENTIONED IN PARA NO.5 OF THE ORDER, AGAINST WHICH THE ASSESSEE SUBMITTED THE REPLY ON DATED 12.02.2019, THEREAFTER, THE APPLICATION OF THE APPLICANT SOCIETY WAS REJECTED BY TH E CIT(E) BY HOLDING AS UNDER: 6. IN RESPONSE TO THE FIXATION LETTER DATED 01.02. 2019 THE APPLICANT SOCIETY SUBMITTED THE REPLY ON 12.02.2019 . ON PERUSAL OF THE SUBMISSIONS MADE BY THE SOCIETY, IT WAS OBSE RVED THAT THE SOCIETY CLAIMS TO CREATE A STATE OF THE ART MULTISP ECIALTY CHARITABLE HOSPITAL IN LUDHIANA. THE SOCIETY HAS PURCHASED LAN D FOR THE CONSTRUCTION OF HOSPITAL AT CIVIL CITY, CHANDER NAG AR, LUDHIANA. THE LAND BOUGHT FOR CONSTRUCTION OF CHARITABLE HOSP ITAL HAS BEEN FUNDED IN THE FORM OF LOAN TO THE TUNE OF RS1,19,72 ,865/- BY THE M/S. INTERNATIONAL MARKETING CORPORATION PVT. LTD. WHICH IS INTEREST BEARING. THE APPLICANT SOCIETY HAS PURCHAS ED LAND ON 24.04.2017 FOR THE CONSTRUCTION OF HOSPITAL AT LUDH IANA. THE APPLICANT SOCIETY HAS RECEIVED DONATIONS TO THE TUN E OF RS.10,33,850/- DURING THE F.Y. 2017-18. IN ORDER TO VERIFY THE CLAIMS OF THE APPLICANT SOCIETY THE FOLLOWING ADDIT IONAL QUERIES WERE ASKED VIDE E-MAIL TO MANAGERACCOUNTS@IMCBUSINE SS.COM ON 09.04.2019 REQUESTING THEM TO SUBMIT THE DETAILS ON 15.04.2019. 3 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) 1. PLEASE CLARIFY WHETHER THE APPLICANT SOCIETY HAS BE EN FORMED TO REDEEM CSR FUNCTIONS OF THE M/S. INTERNATIONAL MARK ETING CORPORATIONS LIMITED. 2. ON PERUSAL OF THE LAND' DEED IT WAS OBSERVED TH AT THE OWNERSHIP OF LAND PURCHASED IS WITH M/S. INTERNATIONAL MARKETING CORPORATIONS LIMITED WHO HAS FUNDED THE LAND IN THE FORM OF LOAN WHICH IS INTEREST BEARING TO CARE & SHARE CHARITABLE SOCIETY. AS MRS. VEENA BHATIA, (PRESIDENT OF CARE & SHARE CHARITABLE SOCIETY) IS T HE W/O SH. ASHOK BHATIA (MANAGING DIRECTOR OF M/S. INTERNATIONAL MAR KETING CORPORATIONS LIMITED) THIS POINT ATTRACTS SECTION 13(3) OF THE I .T. ACT WHICH IS ANY PART OF ITS PROPERTY OR INCOME IS USED OR APPLIED OR ENS URES DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF ANY PERSONS SPECIFIED U/S 13(3) OF THE I. T. ACT. PLEASE COMMENT. 3. PLEASE JUSTIFY THE OUTSTANDING UNSECURED LOAN OF RS . 1,19,72,865/- AS AT MARCH 31,2018 AS YOU HAVE STATED THAT THIS AM OUNT OF UNSECURED LOAN IS ON ACCOUNT OF LAND BOUGHT FOR THE CONSTRUCT ION OF CHARITABLE HOSPITAL WHEREAS THE OWNERSHIP OF THE LAND IS WITH THE COMPANY M/S. INTERNATIONAL MARKETING CORPORATIONS LIMITED. 4. PLEASE PROVIDE THE EVIDENCE REGARDING HANDOVER OF LAND TO SOCIETY AND ITS USAGE BY THE SOCIETY. 5. PLEASE PROVIDE THE DETAILS OF DONATIONS RECEIVED T O THE TUNE OF RS.10,33,850/- DURING THE F.Y.2017-18 ALONG WITH TH E NAME, PAN, ADDRESS ETC. OF THE DONOR. 7 IN RESPONSE TO THE QUERIES RAISED THE APPLIC ANT SOCIETY SUBMITTED THE REPLY. WITH REGARD TO FIRST QUERY THE APPLICANT STATED THAT THE SOCIETY WAS NEVER FORMED TO REDEEM CSR FUN CTIONS OF M/S INTERNATIONAL MARKETING LIMITED. WITH REGARD TO SEC OND QUERY THE APPLICANT STATED THAT THE SOCIETY HAS PURCHASED LAN D AT CHANDER NAGAR, LUDHIANA IN APRIL 2017 IN THE NAME OF THE SO CIETY. EARLIER THE APPLICANT SOCIETY HAS NOT SUBMITTED THE COPY OF THE REGISTERED DEED THE SAME WAS SUBMITTED BY THE COUNSEL OF THE S OCIETY ON 15.04.2019. WITH REGARD TO FIFTH QUERY THE APPLICAN T SOCIETY STATED THAT THE DONATIONS ABOVE RS. 5,000/- WERE ALREADY S UBMITTED. BUT ON PERUSAL OF THE SUBMISSIONS IT GOT REVEALED THAT THE SOCIETY HAS SUBMITTED DETAILS OF DONATIONS FOR THE F.Y. 2016-17 . THE APPLICANT HAS NOT SUBMITTED ANY DETAIL OF DONATIONS RECEIVED TO THE TUNE OF RS.10,33,850/- DURING THE F.Y. 2017-18 ALONG WITH D OCUMENTARY EVIDENCES. AS THE MAIN OBJECT OF THE SOCIETY IS THE CONSTRUCTION OF HOSPITAL CONSTRUCTION OF WHICH IS YET TO BE STARTED . IN THE ABSENCE OF THE HOSPITAL IT IS NECESSITATED TO EXAMINE THE G ENUINENESS OF THE OTHER ACTIVITIES CLAIMED BY THE SOCIETY. IN THIS CO NTEXT THE APPLICANT HAS CLAIMED TO INCUR EXPENDITURE ON LANGE R FOR NEEDY PEOPLE AND EDUCATION AID. THE APPLICANT HAS NOT PRO VIDED ANY DOCUMENTARY EVIDENCES REGARDING EXPENSES INCURRED O R LANGER & EDUCATION AID. IN THE ABSENCE OF THE DOCUMENTARY EV IDENCES 4 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) REGARDING DONATIONS RECEIVED AND EXPENDITURE INCURR ED ON CHARITABLE ACTIVITIES FOR THE F.Y. 2017-18 THE GENU INENESS OF THE ACTIVITIES CANNOT BE ASCERTAINED IN THIS CASE. 8. FURTHER, PERUSAL OF MOA REVEALS THAT AS PER O BJECT CLAUSE NO. 3(V) AND (VI) THAT THE APPLICANT INTENDS TO CONDUCT ITS OPERATION INTERNATIONALLY AS WELL. IT IS PERTINENT TO MENTION HERE THAT THE APPLICABILITY OF SECTION 11 & 12 OF THE ACT IS REST RICTED TO INDIA. TO THAT EFFECT ITS OBJECTS W.R.T. INTERNATIONAL OPERAT IONS ARE NOT IN COMPLIANT WITH THIS RESTRICTION. GIVEN THAT SCENARI O, IT IS CLEAR THAT THE ESSENTIAL ELEMENTS NECESSARY FOR PROPER CO NSTITUTION OF A PUBLIC CHARITABLE SOCIETY ARE MISSING. MOREOVER, TH E APPLICANT SOCIETY HAS MERELY PROVIDED A COPY OF AMENDED MOA A ND BYE- LAWS. IT IS PERTINENT TO MENTION HERE THAT SAME CAN NOT BE AMENABLE AS THE PROVIDED MOA HAS NOT BEEN APPROVED WITH ANY COMPETENT AUTHORITY. NEITHER ERSTWHILE MOA HAS BEEN PROVIDED, IN THE ABSENCE OF WHICH, THE CHANGES MADE BY THE APPLI CANT CANNOT BE ASCERTAINED. SUCH ARRANGEMENT CLEARLY IMPINGES U PON THE GENUINENESS OF APPLICANTS ACTIVITIES. 9. THE APPLICANT SOCIETY HAS NOT CONDUCTED ANY CH ARITABLE ACTIVITY SINCE ITS INSPECTION EXCEPT PURCHASING OF LAND WORTH RS.1,04,48,900/- FOR ITS FUTURE PLAN FOR CONSTRUCTI NG HOSPITAL. THE DIRECTORS OF THE COMPANY (IMC PVT. LTD.) FORWARDING THE LOAN OF RS. 1.06 CRORES TO THE APPLICANT SOCIETY ARE SH. ASHOK BHATIA & SH. SATYAN BHATIA. SMT. VEENA BHATIA, W/O SH. ASHOK BHA TIA IS THE PRESIDENT OF THE APPLICANT SOCIETY AND SMT. ANSHUL BHATIA, W/O SH. SATYAN BHATIA IS THE FINANCE SECRETARY OF THE A PPLICANT SOCIETY. THE WHOLE BUSINESS OF CREATING A SOCIETY, TRANSFERRING A HUGE SUM OF RS. 1.06 CRORES AND PURCHASE OF LAND WI TH INVOLVEMENT OF FAMILY MEMBERS WITHOUT CARRYING OUT ANY OF THE CLAIMED CHARITABLE ACTIVITIES AS PER OBJECT CLAUSE OF THE MOA DO NOT ENTHUSE CONFIDENCE FOR THE GRANT OF APPROVAL U/S 12 AA OF THE INCOME TAX ACT, 1961 AT THIS STAGE. 10. IN LIGHT TO ALL OF THE ABOVE NO SATISFACTION AB OUT THE GENUINENESS OF CHARITABLE ACTIVITIES CAN BE RECORDE D IN THE CASE. THE APPLICATION FOR REGISTRATION U/S 12AA OF THE AC T, WITH THE PRESENT STATE OF AFFAIRS, IS ACCORDINGLY REJECTED. 3. ON AGGRIEVED, THE ASSESSEE SOCIETY IS IN APPEAL BEF ORE US AGAINST THE IMPUGNED ORDER. 4. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(E) REJECTE D THE 5 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) APPLICATION OF THE ASSESSEE SOCIETY ON THE GROUNDS THAT THE APPLICANT HAS NOT SUBMITTED ANY DETAILS OF DONATION S RECEIVED TO THE TUNE OF RS.10,33,850/- DURING THE F.Y.2017-18 ALONG WITH DOCUMENTARY EVIDENCES. AS THE MAIN OBJECT OF THE AS SESSEE SOCIETY IS CONSTRUCTION OF HOSPITAL, CONSTRUCTION OF WHICH IS YET TO BE STARTED. IN THE ABSENCE OF THE HOSPITAL IT IS NECESSITATED T O EXAMINE THE GENUINENESS OF THE OTHER ACTIVITIES CLAIMED BY THE ASSESSEE. IN THIS CONTEXT THE APPLICANT HAS CLAIMED TO INCUR EXPENDIT URE ON LANGER FOR NEEDY PEOPLE AND EDUCATION AID. THE APPLICANT HAS N OT PROVIDED ANY DOCUMENTARY EVIDENCES REGARDING EXPENSES INCURRED O N LANGER AND EDUCATION AID. IN THE ABSENCE OF DOCUMENTARY EVIDEN CES REGARDING DONATIONS RECEIVED AND EXPENDITURE INCURRED ON CHAR ITABLE ACTIVITIES FOR THE F.Y.2017-18, THEREFORE, THE GENUINENESS OF THE ACTIVITIES CANNOT BE ASCERTAINED IN THIS CASE . THE LD. AR OF THE ASSESSEE HAS DRAWN OUR ATTEN TION TO THE SITE PLAN AND ESTIMATE COSTS VALUATION CERTIFICATE QUA CONSTRUCTION OF HOSPITAL [PAGE NO. 46 TO 52 OF PB] WHER EFROM IT REFLECTS THAT THE ASSESSEE SOCIETY IS IN THE PROCESS TO CONSTR UCT THE HOSPITAL. THE LD. AR HAS ALSO DRAWN OUR ATTENTION TO THE FINANCIAL STATEMENT SUCH AS INCOME AND EXPENDITURE ACCOUN T IN THE YEAR ENDED 31 ST MARCH, 2017 WHEREIN RS.10,000/- HAS BEEN SPENT ON MEDICAL AID AND 13,420/- HAS BEEN SPENT FOR LA NGER FOR NEEDY PEOPLE. FURTHER IN YEAR ENDED JULY, 31, 2017 THE ASSESSEE HAS SPENT RS.88,170/- QUA FOOD/MEAL HELP TO NEEDY PERSO NS, THEREFORE, IT CANNOT BE RULED OUT THAT THE ASSESSEE IS NO T DOING ANY CHARITABLE ACTIVITIES AS REASONED BY THE LD. CIT(E). WHILE CONSIDERING THE APPLICATION AND AFORESAID DOCUMENTS AS RE FERRED BY US WERE ALSO AVAILABLE WITH THE CIT(E) AS STATED BY THE LD. AR, THEREFORE, THE OBSERVATION OF THE LD. CIT(E) TO THE EFFECT THAT 6 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) THE APPLICANT HAS NOT PROVIDED ANY DOCUMENTARY EVIDEN CE REGARDING EXPENSES INCURRED ON THE LANGER AND EDUCATIO N AID, IS ALSO NOT SUSTAINABLE. 4.1 THE CIT(E) ALSO OBSERVED THAT AS PER OBJECT CLAUSE NO.3(V) AND (VI), THE APPLICANT INTENDS TO CONDUCT ITS OPER ATION INTERNATIONALLY AS WELL, WHEREAS THE APPLICABILITY OF SECTION 11 & 12 OF THE ACT IS RESTRICTED TO INDIA, THEREFORE, TO TH AT EFFECT, ITS OBJECTS W.R.T INTERNATIONAL OPERATIONS ARE NOT IN COMPLIANT WITH THIS RESTRICTION. GIVEN THAT SCENARIO, IT IS CLEAR THAT THE ESSENTIAL ELEMENTS NECESSARY FOR PROPER CONSTITUTION OF A PUBLIC CHARI TABLE SOCIETY ARE MISSING. MOREOVER, THE APPLICANT SOCIETY HAS MERELY PROVIDED A COPY OF AMENDED MOA AND BYE LAWS. IT IS PERTINENT TO MEN TION HERE THAT THE SAME CANNOT BE AMENABLE AS THE PROVIDED MOA HAS NOT BEEN APPROVED WITH ANY COMPETENT AUTHORITY. NEITHER ERST WHILE MOA HAS BEEN PROVIDED, IN THE ABSENCE OF WHICH, THE AMENDME NT MADE BY THE APPLICANT CANNOT BE ASCERTAINED. SUCH ARRANGEME NT CLEARLY IMPINGES UPON THE GENUINENESS OF APPLICANTS ACTIVI TIES. FROM THE OBJECT CLAUSE 3 (V) & (VI) IT REFLECTS THAT THE SOCIETY WILL HONOUR THE BRILLIANT STUDENTS AT NATIONAL AND INTERNATIONAL LEVELS WHO HAVE DISTINGUISHED THEMSELVES IN ANY FILED PARTICULARLY EDUCATION, TO OPEN BRANCHES OF THE SOCIETY AT THE VILLAGE, TEHSIL, DISTRICT, REGIONAL, STATE, NATIONAL AND INTERNATIONAL LEVELS A ND TO GET THEM AFFILIATED WITH THE REQUIRED AUTHORITIES. WE AR E OF THE CONSIDERED OPINION THAT THE LD. CIT(E) IS EMPOWERED TO PUT ANY CONDITION WHILE GRANTING THE REGISTRATION U/S 12AA OF THE ACT AND IF THE LD. CIT(E) THINKS FIT AND PROPER THEN THE LD . CIT(E) SHALL BE AT LIBERTY TO RESTRICT THE ASSESSEE SOCIETY OPERATION IN INDIA ONLY, BUT THIS GROUND FOR REJECTION OF THE APPLICATION IS UNSUSTAINABLE. 7 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) 4.2 THE LD. CIT(E) FURTHER OBSERVED THAT THE ESSENTIAL ELEMENTS NECESSARY FOR PROPER CONSTITUTION OF PUBLIC CHARITA BLE SOCIETY ARE MISSING. FROM THE MOA AND AIMS AND OBJECTS OF THE SOCIETY AND ACTIVITIES SET OUT BY THE ASSESSEE SOCIETY, IT DOES NOT REFLE CT SO, AS OBSERVED BY THE LD. CIT(E), HENCE, WE CANNOT APPROVE THIS REASON AS WELL. 4.3 THE LD. CIT(E) FURTHER OBSERVED THAT THE APPLICANT SOCIETY HAS MERELY PROVIDED A COPY OF MOA AND BYE LAWS WHI CH HAS NOT BEEN APPROVED WITH ANY COMPETENT AUTHORITY. NEITHER ERSTWHILE MOA HAS BEEN PROVIDED, IN THE ABSENCE OF WHICH, THE CHA NGES MADE BY THE APPLICANT CANNOT BE ASCERTAINED . THE LD. AR SUBMITTED THAT ERSTWHILE MOA IS ALREADY ON RECORD, SINCE THE APPLICATI ON UNDER CONSIDERATION IS CONTINUATION OF THE EARLIER APPLICATION , WHICH WAS RESTORED TO THE FILE OF THE LD. CIT(E) FOR DECISION AF RESH BY THE CO-ORDINATE BENCH VIDE ITS ORDER DATED 27.06.2018 PASSE D IN ITA NO.694/ASR/2017. WE HAVE PERUSED THE ORDER PASSED BY TH E CO- ORDINATE BENCH AND FOUND THE CONTENTION OF THE ASSESSEE CO RRECT. EVEN OTHERWISE WE REALIZED THAT THE ASSESSEE HAS FILED MO A OF SOCIETY WITH ITS REGISTRATION NO.20160020623/309 OF 201 6-17, DATED 19.08.2016 (PB PAGE 1 TO 11) AND THE AMENDED MOA DULY CERTIFIED BY THE SUB-REGISTRAR, LUDHIANA VIDE ITS STAMP DATED 17.01.2018. CONSIDERING THE FACTS, WE ARE UNABLE TO A PPROVE THIS GROUND OF REJECTION AS WELL. 4.3 FURTHER, THE LD. CIT(E) HAS OBSERVED IN PARA NO.09 TH AT THE APPLICANT SOCIETY HAS NOT CONDUCTED ANY CHARITABLE ACTI VITY SINCE ITS INCEPTION EXCEPT PURCHASING OF LAND WORTH OF RS.1,04,48,900/- FOR ITS FUTURE PLAN FOR CONSTRUCTION OF HOSPITAL. THE DIRECTORS OF COMPANY (IMC PVT. LTD.) FORWARDING T HE LOAN OF RS.1,06 CORES TO THE APPLICANT SOCIETY ARE SH. ASHOK BHAT IA AND 8 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) SH. SATYAM BHATIA WHEREAS SMT. VEENA BHATIA, W/O SH. ASHOK BHATIA IS THE PRESENT PRESIDENT OF THE APPLICANT SOCIETY AND SMT. ANSUL BHATIA W/O SH. SATYAM BHATIA IS THE FINANCE SECR ETARY OF THE SOCIETY, WHOLE BUSINESS OF CREATING A SOCIETY, TRANSFERR ING OF HUGE SUM OF RS.1,06 CORES AND PURCHASE OF LAND WITH INVOLVEMENT OF FAMILY MEMBERS WITHOUT CARRYING OUT AN Y OF THE CLAIMED CHARITABLE ACTIVITIES AS PER OBJECT CLAUSE OF THE M OA, DO NOT ENTHUSE CONFIDENT FOR THE GRANT OF APPROVAL U/S 12 AA OF THE INCOME TAX ACT, 1961 AT THIS STAGE. THE CO-ORDINATE BEN CH AT AMRITSAR, IN THE CASE OF SANT ISHWAR SHIKSHA SAMITI, JA MMU AND SANT ISHWAR FOUNDATION (ITA NO.670(ASR)/2015 & ITA N O.671 (ASR)/2015, DECIDED ON 30-08-2017 ) , WHILE DEALING W ITH THE SIMILAR AND IDENTICAL ISSUE, WHERE THE SOCIETY WAS AT NASCE NT STAGE, ANALYZED THE POSITION OF LAW AS WELL AS ISSUE IN H AND. RELEVANT PART OF THE SAID DECISION IS REPRODUCED HEREIN BELOW FOR THE SAKE OF BREVITY AND READY REFERENCE. 6. WE HAVE GONE THROUGH THE FACTS AND CIRCUMSTANC ES OF THE CASE AND ALSO RIVAL SUBMISSIONS OF THE PARTI ES, RELEVANT DATES ARE VERY MUCH MATERIAL IN THE INSTAN T CASE. THE TRUST WAS ESTABLISHED AND REGISTERED ONLY ON 12 TH MARCH, 2015 AND THEREAFTER, APPLICATION FOR REGISTR ATION U/S 12A WAS FILED ON 29.04.2015 AND MAIN OBJECTS OF THE TRUST ARE ESTABLISHMENT OF EDUCATIONAL INSTITUTION AND/OR MAINTENANCE OF EDUCATIONAL INSTITUTION ,MEDITATION AND PRAYER HALLS, GRANTING OF SCHOLARSHIP AND FINANCIA L ASSISTANCE TO NEEDY FOR EDUCATIONAL PURPOSES AND ESTABLISHMENT OF HOSPITALS AND NURSING HOMES ETC. W HICH ARE COVERED UNDER THE DIMENSION OF SEC.2(15) OF THE I.T. ACT. FURTHER WE FEEL IT APPROPRIATE TO REPRODUCE HEREIN THE CONTENTS OF SEC.12AA OF THE ACT. SECTION 12AA (1) THE CHIEF COMMISSIONER OR COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRU ST OR 9 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) INSTITUTION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) O F SUB- SECTION (1)] OF SECTION 12A , SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDE R TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRI ES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACT IVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTI ON, 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. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION WHICH THE APPLICATI ON WAS RECEIVED UNDER CLAUSE (A) OF SECTION 12A.] FROM THE CONTENTS OF THE SEC.12AA, IT ENCOMPASS THAT THE LD. CIT(E) IN ORDER TO SATISFY HIMSELF ABO UT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTI TUTION CAN CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRU ST OR INSTITUTION AS HE THINKS NECESSARY AND ALSO EMPOWER ED TO MAKE SUCH ENQUIRY AS HE MAY DEEM FIT NECESSARY IN T HIS BEHALF. SECOND CLAUSE DEALS WITH THAT AFTER SATISFYING HIMSELF ABOUT THE OBJECT OF THE TRUST OR INSTITUTIO N AND THE GENUINENESS OF THE ACTIVITIES, HE SHALL PASS ORDER IN WRITING EITHER TO REGISTER OR REFUSING TO REGISTER THE TRUST OR INSTITUTIONS. LET US TO CONSIDER JUDICIAL VERDICTS ON THE ISSUES IN HAND : DELHI HIGH COURT IN THE CASE OF DIT VS. FOUNDATION OF OPTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTER, IN ITA NO.1687/2010 , DECIDED ON DATED 16.08.2012 DEAL T WITH THE SAME SITUATION AND OBSERVED AS UNDER: 10 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) THAT THE CONCERN CIT IS NOT REQUIRED TO EXAMINE TH E QUESTION WHETHER THE TRUST HAS ACTUALLY COMMENCED A ND HAS, IN FACT, CARRIED ON CHARITABLE ACTIVITIES ? GUJRAT HIGH COURT IN THE CASE OF CIT -1, VS. KUTCHI DASA OSWAL MOTO PARIWAR AMBAMA TRUST (2014 271 CTR 0595 WAS PLEASED TO HELD THAT 'WHILE CONSIDERING THE APPLICATION U/S 12AA, THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE OBJEC TIVES OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES AND FOR SUCH PURPOSES, HE HAS THE POWER TO CALL FOR SUCH DOCUMEN TS OR INFORMATION FROM THE TRUST AS HE THINK ARE NECESSAR Y. HOWEVER, THIS DOES NOT MEAN THAT IF THE ACTIVITIES OF THE TRUST HAVE NOT COMMENCED THE COMMISSIONER HAS AUTHORITY TO REJECT ITS APPLICATION FOR REGISTRATIO N ON THE GROUND THAT THE TRUST HAS FAILED TO CONVINCE HIM AB OUT THE GENUINENESS OF THE ACTIVITIES. THAT IS WHAT UNFORTU NATELY THE COMMISSIONER DID IN THE PRESET CASE '. FURTHER, ALLAHABAD HIGH COURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST VS. COMMISSIONER OF INCOME TAX-II, AGRA DECIDED ON 15 MARCH, 2013 OBSERVED THAT: ' THE PREPONDERANCE OF THE JUDICIAL OPINION OF HIGH COURTS AS WELL AS ITAT IS THAT AT THE TIME OF REGIS TRATION U/S 12AA OF THE ACT, THE CIT IS NOT REQUIRED TO LOO K INTO THE ACTIVITIES, WHERE SUCH ACTIVITIES HAVE NOT OR A RE IN THE PROCESS OF ITS INITIATION. WHERE A TRUST, SET UP TO ACHIEVE ITS OBJECTS OF ENABLING EDUCATIONAL INSTITUTION, IS IN THE PROCESS OF ESTABLISHING SUCH INSTITUTION AND RECEIV ES DONATIONS, THE REGISTRATION U/S 12AA CANNOT BE REFU SED, ON THE GROUND THAT THE TRUST HAS NOT YET COMMENCED THE CHARITABLE OR RELIGIOUS ACTIVITY' . FURTHER, CO-ORDINATION BENCH OF ITAT, AMRITSAR IN T HE CASE OF EK UMEED WELFARE SOCIETY, FAZIKA VS. ASSES SEE IN ITA NO.615(ASR)/2013 'DIRECTED TO GRANT REGISTRATION TO THE SOCIETY WHER E THE REGISTRATION WAS DENIED BY THE CIT ON GROUND OF NEGLIGIBLE ACTIVITY TILL THE DATE OF REGISTRATION'. LET US TO CONSIDER REASONS FOR REJECTION OF APPLICATION FOR GRANT OF REGISTRATION U/S 12 AA OF THE ACT: 11 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) FIRST REASON FOR DENIAL OF REGISTRATION BY THE LD. CIT WAS THAT THAT THE ASSESSEE TRUST HAS NOT CARRIED OU T ANY ACTIVITY. SECOND REASON THAT THE ASSESSEE TRUST HAS INITIALLY DECIDED TO CONSTRUCT SCHOOL & MEDITATION HALL AT AS AR DODA BUT LATER PURCHASED LAND FOR SCHOOL AT NIABHAT , NAGROTA THIRD REASON THAT THE ACTIVITIES OF ASSESSEE TRUST ARE CONTROLLED BY ONE FAMILY . THE REASONS GIVEN BY THE LD. CIT(E ) DOES NOT SOUND GOOD BECAUSE , ONE SIDE REASONED THAT NO ACTIVITY H AS BEEN CARRIED OUT BY THE ASSESSE TRUST , ON THE OTHE R HAND HAS DOUBTED THE INTENTS OF THE OBJECTS AND FURTHER OBSERVATION THAT INITIALLY THE ASSESSEE WANTED TO CONSTRUCT SCHOOL & MEDITATION HALL AT ASAR DODA BUT LATER PURCHASED LAND FOR SCHOOL AT NIABHAT, NAGROTA , IN OUR VIEW , THE TRUST THAT TIME WAS UN-DOUBTLY AT NASCE NT STAGE AND HAS NOT CARRIED OUT ANY ACTIVITY EXCEPT T O MAKE EFFORTS FOR PROCURING LAND FOR SCHOOL , HOWEVER LA TER ON PURCHASED THE LAND FOR SCHOOL AT NIABHAT, NAGROTA , WHICH CLEARLY SHOWS THE INTENTION OF THE TRUST AS THE MAI N OBJECT OF THE TRUST IS TO ESTABLISH SCHOOLS ETC. AND TO P ROVIDE EDUCATION, THEREFORE, ONE CAN EXPECT FROM THE TRUST TO DO ACTIVITY OF THE CHARITY IMMEDIATELY AND IN THAT SIT UATION THE AUTHORITY CANNOT COME TO THE CONCLUSION THAT TH E INTENT CONTAINED IN THE OBJECTS OF THE TRUST DO NOT FIND CORROBORATION IN THE SHAPE OF ANY POSITIVE ACTION T AKEN TOWARDS EITHER EDUCATION OR ANY OF THE OTHER OBJECT S ENUNCIATED IN THE TRUST DEED , AS OBSERVED BY THE L D. CIT (E ) . THIRD REASON THAT THE ACTIVITIES OF ASSESSEE TRUST ARE CONTROLLED BY ONE FAMILY IS ONLY AN APPREHENSION OF THE LD. CIT (E ) ,WHICH ACCORDING TO OUR MIND CAN NOT B ASE REJECTION OF THE REGISTRATION BECAUSE THE REVENUE AUTHORITY IS AT LIBERTY TO WITHDRAW AND/OR TO CANCE L THE REGISTRATION AN ANY TIME ON THE SPECIFIED REASONS ENUMERATED IN THE ACT. FURTHER FROM THE DOCUMENTS FILED BEFORE US, IT REFLECTS THAT THE ASSESSEE TRUST HAS ALREADY PURCHA SED THE LAND WHICH IS 9 KANALS 19 MARLAS SITUATED AT VI LLAGE BALIAN, TESHIL UDHAMPUR, AND FURTHER ALSO GOT APPR OVED SANCTIONED PLAN FOR CONSTRUCTION OF SCHOOL FROM THE CONCERNED EXECUTIVE ENGINEER OF THE AREA , NO OBJE CTION FOR CONSTRUCTION FROM THE CONCERNED PANCHAYAT AND 12 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) CONSTRUCTION OF SCHOOL IS AT ADVANCE STAGE AND ALS O EXECUTED MEMORANDUM OF UNDERSTANDING WITH THE BHARTIYA SHIKSHA SAMITI, WHICH IS INVOLVED IN THE FIELD OF IMPARTING FORMAL EDUCATION HAVING ESTABLISHED A NUM BER OF PRIMARY AND SECONDARY LEVEL SCHOOLS IN DIFFEREN T PART OF JAMMU & KASHMIR AS SUBMITTED . FURTHER FROM THE CUTTING OF NEWSPAPERS, IT REFLECT S THAT INAUGURATION FOR CONSTRUCTION AND LAYING STONE FOR ESTABLISHMENT OF THE SCHOOL HAS ALREADY BEEN DONE A ND AS PER COMPUTATION OF INCOME OF ASST. YEAR: 2016-17 IT REFLECTS THAT THE ASSESSEE TRUST HAS RECEIVED RS.1,80,52,900/- AS VOLUNTARILY CONTRIBUTION AND D URING THE FINANCIAL YEAR THE ASSESSEE TRUST HAS INCURRED THE EXPENDITURE OF RS.13089100 AND RS.379000 FOR THE PURCHASE OF THE LAND AND ITS CONSTRUCTION FOR SCHOO L PURPOSES, AND FURTHER INCOME AND EXPENDITURE FOR TH E PERIOD ENDED 31 ST MARCH, 2016 SHOWS THAT THE ASSESSEE TRUST HAS CONTRIBUTED RS.11,000/- TO THE P.M. RELIE F FUND AND RS. 9,472/- FOR CLEANING MOMENT AT KATRA AND RS.5,640/- FOR THE ENVIRONMENT AWARENESS AND RS.8,548/- FOR MEDICAL CARE AT FDR. ON PERUSAL OF RECORDS AND JUDGMENTS, IT IS CLEAR TH AT AT THE TIME OF REGISTRATION U/S 12AA OF THE ACT, TH E LD. CIT(E) IS REQUIRED TO SEE THE OBJECTS OF THE TRUST OR INSTITUTIONS AND GENUINENESS OF ITS ACTIVITIES, HOW EVER, IF WE COME TO THE INSTANT CASE, THEN IT IS NOT DISPUTE D THAT THE TRUST WAS FORMED AND REGISTERED ONLY ON 12 TH MARCH, 2015 THEREAFTER, APPLICATION FOR REGISTRATION U/S 1 2AA WAS FILED ON 15.05.2015 AND THE IMPUGNED ORDER WAS PASSED ON 30 TH NOV. 2015 AND TILL THE DISPOSAL OF THE APPLICATION THE ASSESSEE HAS ONLY RECEIVED SINGLE DONATION AND TRIED TO PROCURE THE LAND FOR ESTABLIS HMENT OF THE SCHOOL AND FURTHER BECAUSE THE ASSESSEE TRUS T WAS AT NASCENT STAGE, THEREFORE, COULD NOT CARRY ANY AC TIVITY AND ACCORDING TO AFORESAID JUDGMENTS IT IS CLEAR TH AT STATUTE DOES NOT PRESCRIBE A WAITING PERIOD FOR A N EWLY REGISTERED TRUST TO QUALIFY ITSELF FOR REGISTRATION UNDER SECTION 12AA OF THE ACT AND WAIT TILL THE ACTIVITY COMMENCE. FROM THE CONJOINT READING OF THE AFORESAI D JUDGMENTS, IT CAN BE SAFELY CONCLUDED THAT EVEN OTH ERWISE IF NO ACTIVITY WAS CARRIED OUT BY A TRUST OR INSTI TUTION, STILL REGISTRATION CAN BE GRANTED BY THE CIT(E) AND EVEN OTHERWISE IT IS NOT THE CASE OF THE REVENUE THAT AT THE TIME OF CONSIDERATION OF APPLICATION OF THE ASSESSEE , T HE ASSESSEE HAS CARRIED OUT MANY ACTIVITIES AND THEIR GENUINENESS WERE IN DOUBT BUT IN THE INSTANT CASE 13 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) GRIEVANCE OF THE CIT(E) IS ONLY THAT THERE WAS NO A CTIVITY CARRIED OUT BY THE ASSESSEE. ALTHOUGH FORM THE DOCUMENTS SUBMITTED BEFORE US POSITIVELY REFLECTS THAT THE ASSESSEE TRUST HAS CAR RIED OUT MANY ACTIVITIES IN FURTHERANCE OF OBJECTS OF THE TR UST, HOWEVER BECAUSE THE SAME ACTIVITIES HAVE NOT BEEN CARRIED OUT AND DOCUMENTS WERE ALSO NOT SUBMITTED BEFORE THE LD. CIT (E ) TILL THE DATE OF ADJUDICATI ON OF APPLICATION , HENCE WE ARE NOT TAKING INTO CONSIDER ATION THE SAID DOCUMENTS AND FACTS , HOWEVER IN OVERALL CONSIDERATION OF THE JUDICIAL INTERPRETATION , PECU LIAR FACTS AND CIRCUMSTANCES AND SITUATION, IN OUR CONSIDERED OPINION THE LD. CIT(A) WAS UNDER OBLIGATION TO CONS IDER THE OBJECTS OF THE TRUST WHICH ARE AVAILABLE IN THE TRUST DEED ITSELF. EVEN OTHERWISE, THE CONCERNED REVENUE AUTHORITY WAS EMPOWERED TO WITHDRAW THE REGISTRATIO N ALREADY GRANTED OR CANCEL THE SAID REGISTRATION IF HE CAME ACROSS THAT FACTUALLY TRUST HAS NOT CONDUCTED ANY CHARITABLE ACTIVITIES. ALTHOUGH, IN THE OPEN COURT WE HAD SHOWN OUR INCLINATION TO REMAND THE CASE WITH DIRECTION TO TH E ASSESSEE TO APPROACH THE LD. CIT(E) WITH THE DOCUME NTS AS SUBMITTED BEFORE THIS FORUM BECAUSE THE DOCUMENT S WERE NOT AVAILABLE BEFORE THE CIT(E), HOWEVER, CONSIDERING THE PRINCIPLES LAID DOWN BY THE VARIOUS COURTS AS IT IS NOT IN CONTROVERSY THAT TILL THE ADJUDICATION OF APPLICATION U/S 12AA OF THE ACT, TH E TRUST WAS AT NASCENT STAGE AND ALL THE ACTIVITIES WHICH ARE REFLECTING FROM THE DOCUMENTS SUBMITTED HEREIN ARE OF THE LATER STAGE, HOWEVER, IN OUR CONSIDERED OPINION AT THE TIME OF DISPOSAL OF APPLICATION, THE LD. CIT(E) IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION CAN CALL FOR SUCH DOCUMENT S OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY AND ALSO EMPOWERED TO MAKE SUCH ENQUIRY AS HE MAY DEEM FIT NECESSARY IN THIS BEHALF , SECONDLY THAT AFTER SATISFYING HIMSELF ABOUT THE OBJECT OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF THE ACTIVITIES, HE SHALL PASS ORDER IN WRITING EITHER REGISTER OR REFUSING TO REGISTER THE TRUST OR INSTITUTIONS. IN THE INSTANT CASE NO ACTIV ITY WAS CARRIED OUT THEREFORE QUESTION OF GENUINENESS DID NOT ARISE. HENCE, WE DIRECT THE LD. CIT(E) TO GRANT THE REGISTRATION U/S 12A OF THE ACT TO THE ASSESSEE AND IT IS 14 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) CLARIFIED IN CASE, THE ASSESSEE DOES NOT QUALIFY/SA TISFY THE OBJECTS OF THE TRUST AND/OR NOT INVOLVED IN GEN UINE ACTIVITIES , THEN THE CONCERNED AUTHORITY SHALL BE AT LIBERTY TO WITHDRAW OR TO CANCEL THE REGISTRATION U/S 12A O F THE ACT. HENCE, IN THE AFORESAID OBSERVATIONS, THE APPEAL FI LED BY THE ASSESSEE IS ALLOWED. IN VIEW OF THE AFORESAID OBSERVATION AND CONCLUSION DRAWN BY THE CO-ORDINATE BENCH, IT IS TRITE TO SAY TH AT WHERE THE ASSESSEE SOCIETY IS AT NASCENT STAGE THEN IT CANNOT BE EXPECTED THAT THE SOCIETY MUST DO SOME CHARITABLE WORK BEFORE SEE KING GRANT OF REGISTRATION U/S 12AA OF THE ACT AND CONSEQUEN TLY CONSIDERATION OF GENUINENESS OF THE ACTIVITIES BY THE LD. CIT DOES NOT ARISE. IN THE INSTANT CASE THE LD. CIT(E) HAS THAT NO CHA RITABLE ACTIVITY HAS BEEN CONDUCTED BY THE APPLICANT SOCIETY SINCE ITS INCEPTION EXCEPT PURCHASING LAND. WE HAVE GIVEN OUR THO UGHTFUL CONSIDERATION TO THIS REASON OF REJECTION. THOUGH THE ASSE SSEE SOCIETY THOUGH HAS NOT STARTED CONSTRUCTION OF ITS HOSPITAL YET BUT IT IS A CASE THAT THE ASSESSEE SOCIETY HAS BEEN FORMED ONLY O N 19.08.2016 AND HAS ALREADY PURCHASED THE LAND AND IS IN THE PROCESS OF CONSTRUCTING HOSPITAL FOR WHICH SITE PLAN HAS AL READY BEEN PREPARED AND PLACED BEFORE THE LD. CIE(E) AS WEL L AS BEFORE US FOR PERUSAL WHICH FURTHER STRENGTHEN THE CONTENTION O F THE ASSESSEE THAT THE PURCHASE OF LAND FOR CONSTRUCTION OF HOSPIT AL AND STARTING PROCESS FOR CONSTRUCTION OF HOSPITAL IS CERTAIN LY IN PURSUANCE TO THE AIMS AND OBJECTIONS OF THE SOCIETY AND SO UGHT REGISTRATION U/S 12AA OF THE ACT WHICH WAS DECLINED ON 2 9 TH SEP. 2017, AGAINST WHICH THE ASSESSEE SOCIETY PREFERRED AN APP EAL 15 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) BEFORE THE CO-ORDINATE BENCH AND CO-ORDINATE BENCH WH ILE DECIDING ITA NO.694/ASR/2017 VIDE ITS ORDER DATED 27. 06.2018 REMANDED THE CASE TO THE FILE OF THE LD. CIT(E) FOR D ECISION AFRESH, THEREAFTER, THE IMPUGNED ORDER DATED 30.04. 2019 HAS BEEN PASSED. FROM THE PECULIAR FACTS AND CIRCUMSTANCES, WE A RE OF THE CONSIDERED OPINION THAT THE ASSESSEE SOCIETY IS AT NASCENT STAGE BUT EVEN OTHERWISE CARRIED OUT SMALL CHARITABLE ACT IVITIES SUCH AS PROVIDING MEDICAL AID AND LANGER TO THE NEEDY P EOPLE DURING THE F.Y. 2017-18, THEREFORE, THE OBSERVATION OF THE LD. CIT(E) THAT THE APPLICANT SOCIETY DID NOT CONDUCT ANY CHARITABLE ACTIVITY SINCE ITS INCEPTION, IS NOT SUSTAINABLE. 4.4 THE LD. CIT(E) ALSO RAISED DOUBT ABOUT THE CONFIDENCE F OR GRANT OF APPROVAL BY OBSERVING THAT DIRECTORS OF THE COMPANY (IMC PVT. LTD.) HAVE GRANTED THE LOAN OF RS.1,06 CORES T O THE APPLICANT SOCIETY ARE RELATIVE OF THE PRESIDENT AND FINANCE S ECRETARY OF THE APPLICANT SOCIETY, THEREFORE, INVOLVEMENT OF THE FA MILY MEMBERS WITHOUT CARRYING OUT ANY OF THE CLAIM OF CHARITABLE ACTIVITIES AS PER CLAUSE OF MOA DO NOT ENTHUSE CONFIDENCE FOR THE GRA NT OF APPROVAL U/S 12AA OF THE INCOME TAX ACT . AS PER SECTION 12 OF THE ACT, AT THE TIME OF CONSIDERATION OF APPLICATION U/S 12AA OF TH E ACT, THE LD. CIT(E) IS AT LIBERTY TO SATISFY HIMSELF ABOUT THE O BJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVIT IES. AS IN THE INSTANT CASE, THE OBJECTS OF THE SOCIETY ARE NOT IN D OUBT EXCEPT OPERATION INTERNATIONALLY AND THE ASSESSEE HAS NOT CARRIED OUT MUCH ACTIVITY THEREFORE THE GENUINENESS OF ACTIVITI ES CANNOT BE ASCERTAINED AT THIS STAGE. 16 ITA NO.404/ASR/2019 (A.Y.2017-18) CARE & SHARE WELFARE SOCIETY V S. CIT(E) 4.5 AS PER ACT, THE LD. CIT(E) IS AT LIBERTY TO CANCEL THE REGISTRATION AT ANY TIME, ONCE HE IS SATISFY THAT THE A CTIVITY OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT B EING CARRIED OUT IN ACCORDANCE WITH OBJECTS OF THE TRUST OR INSTITUTIO N AS THE CASE MAY BE, THEREFORE IN THIS CASE, IF THE LD. COMMISSIO NER WILL FIND IN-GENUINENESS OF ASSESSEE'S ACTIVITIES AND NOT IN CONSONANCE WITH AIMS AND OBJECTS ASSESSEE SOCIETY, THEN SHALL BE AT LIBERTY TO CANCEL THE REGISTRATION. 4.6 CONSIDERING OVER ALL PECULIAR FACTS AND CIRCUMSTANCE S WE ARE INCLINED TO DIRECT THE LD. CIT(E) TO GRANT THE RE GISTRATION TO THE APPLICATION SOCIETY. SUFFICE TO SAY THE LD. CIT(E) SH ALL BE AT LIBERTY TO PUT ANY CONDITION(S)/RESTRICTION(S) SUCH AS T HE SOCIETY OPERATION SHALL BE FOR THE WELFARE OF INDIAN CITIZEN S AND WITHIN THE TERRITORY OF THE INDIA ONLY, IF FIND REASONABLE AS PER LAW AND ALSO TO VERIFY THE ORIGINAL MOU AND AMENDED MOU OF T HE SOCIETY. 44 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED WITH THE AFORESAID OBSERVATIONS. ORDER PRONOUNCED IN OPEN COURT ON 03.09.2019. SD/- SD/- ( VIKRAM SINGH YADAV ) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 03.09.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) CARE & SHARE WELFARE SOCIETY INTERNATIONAL MA RKETING CORPORATION, GURU NANAK DEV BHAWAN, NEAR BHARAT NAG AR CHOWK, LUDHIANA PARK, JALANDHAR-144 003 (PUNJAB) (2) THE CIT(EXEMPTIONS), CHANDIGARH (3) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER