M/s Ankur Pragatisheel Mahila Kendra, V. The CIT,

ITA 450/IND/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0070 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 30-09-2009
• Assessment Year: misc
• Appeal Filed On: 09-08-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Assessee Lawyers: S S DESHPANDE
• Keywords: Gift; Charitable institution; Opportunity of being heard; Reasonable cause
• Section: 12A; 12AA; 27; 12; 11

Judgement Text

PAGE 1 OF 16 IN THE INCOME TAX APPELATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI V.K. GUPTA, AM ITA NO.450/IND/2007 UNDER SECTION 12A/12AA OF THE IT ACT ANKUR PRAGATISHEEL MAHILA KENDRA C/O PATEL & GUPTA (CA) 543, VIKRAM TOWER, SAPNA SANGEETA ROAD, INDORE (PAN AAMFA 9170 B) APPELLANT V/S. CIT, UJJAIN RESPONDENT ASSESSEE BY SHRI S.S. DESHPANDE, CA DEPARTMENT BY SHRI K.K. SINGH, CIT, DR ORDER PER JOGINDER SINGH, JM THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT, UJJAIN DATED 11.1.2007 UNDER SECTION 12A/12AA OF THE IT ACT, 196 1 ON THE GROUND THAT O N THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CI T ERRED IN REJECTING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12 A OF THE ACT. THE ASSESSEE ALSO MOVED APPLICATION FOR CONDONATION OF DELAY. WE HAVE HEARD THE LD. REPRESENTATIVES FROM BOTH SIDES AND FOUND THAT THER E IS A REASONABLE CAUSE FOR PAGE 2 OF 16 DELAY IN FILING APPEAL BEFORE THE TRIBUNAL, CONSEQU ENTLY, THE DELAY IS CONDONED. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I S.S. DESHPANDE, LD. COUNSEL FOR ASSESSEE AND SHRI K.K. SINGH, LD. CIT, DR. THE CRUX OF ARGUMENT FOR THE ASSESSEE IS THAT THE LD. CIT IS NOT JUSTIFI ED IN DENYING REGISTRATION TO THE ASSESSEE AS THE ACTIVITIES OF THE ASSESSEE ARE OF CHARITABLE IN NATURE. OUR ATTENTION WAS INVITED TO VARIOUS PAGES OF THE PAPER BOOK BY CONTENDING THAT ALL THE ACTIVITIES OF THE ASSESSEE ARE DEFINITELY F OR CHARITABLE PURPOSES AND THERE IS NO EVEN ALLEGATION OF MISUSE OF ANY FUND I N ANY MANNER. IT WAS POINTED OUT THAT THE ACTIVITIES ARE TO HELP TO STUD ENTS OF BLIND SCHOOLS, ACTIVITIES OF NASHA MUKTI JAGRUKTA ABHIYAN, HUMAN V ALUE PROGRAMME, EYES CAMP ETC. HOWEVER, THE LD. CIT, DR STRONGLY DEFENDE D THE IMPUGNED ORDER BY CONTENDING THAT PROVIDING TRAINING TO PANCHAYATI RA J OFFICERS IS OF COMMERCIAL NATURE, THEREFORE, THE REGISTRATION U/S 12A WAS RIG HTLY DENIED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON THE FILE. WE HAVE FOUND THAT THE LD. C IT DENIED REGISTRATION TO THE ASSESSEE ON THE GROUND THAT ONE OF THE OBJECT OF TH E ASSESSEE IS ALSO TO PROVIDE TRAINING TO PANCHAYATI RAJ OFFICERS WHICH I S A COMMERCIAL ACTIVITY BEING FUNDED BY THE STATE GOVT., THEREFORE, IT IS NOT OF CHARITABLE IN NATURE. WE ARE NOT AGREEING WITH THIS OBSERVATION OF THE LD. CIT B ECAUSE WHILE CONSIDERING PAGE 3 OF 16 THE APPLICATION OF THE ASSESSEE FOR GRANTING REGIST RATION U/S 12A ALL THAT LD. COMMISSIONER IS TO EXAMINE WHETHER THE APPLICATION MADE IS IN ACCORDANCE WITH THE REQUIREMENT OF THAT SECTION R.W. RULE 17A AND ALSO WHETHER FORM 10A HAS BEEN PROPERLY FILLED UP. HE MAY ALSO SEE WHETHE R THE OBJECTS OF THE ASSESSEE ARE CHARITABLE OR NOT. THE LANGUAGE OF SEC . 12A DOES NOT SHOW THAT IN ORDER TO GET REGISTRATION, THERE IS NECESSITY OF FIRST ESTABLISHING AS TO HOW THE CONCERNED INSTITUTION OR AS THE CASE MAY BE, TH E SOCIETY WOULD BE ABLE TO CLAIM THE EXEMPTION U/S 11 OR 12 OF THE ACT. AT THE STAGE OF GRANT OF CERTIFICATE FOR REGISTRATION, THE MAJOR INQUIRY POS SIBLY SHOULD BE WHETHER THE SOCIETY HAS ACTUALLY MADE AN APPLICATION IN TIME AN D ALSO WHETHER THE ACCOUNTS OF THE SOCIETY ARE MAINTAINED IN THE MANNE R SUGGESTED IN THE SECTION. THE RATIO LAID DOWN BY THE CHANDIGARH BENC H OF THE TRIBUNAL IN THE CASE OF COMMAND AREA DEVELOPMENT AUTHORITY, PANCHKU LA VS. CIT (ITA NO.282/CH/2009) FORTIFIES THE CASE OF THE ASSESSEE, WHEREIN, ONE OF US (JUDICIAL MEMBER) IS SIGNATORY TO THE ORDER. THE RE LEVANT PORTION OF THE ORDER IS REPRODUCED HEREWITH: THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 29.1.2009 ON THE GROUND THAT THE ORDER OF THE LEARNED COMMISSIONER ARE ERRONEOUS, DEVOID OF MERITS HAS BEEN P ASSED IN HASTE WITHOUT CONSIDERING THE TRUE FACTS AND CONSEQUENT DEN IAL OF REGISTRATION UNDER SECTION 12A OF THE ACT. PAGE 4 OF 16 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHRI SA NJAY MEHTANI, LD COUNSEL FOR THE ASSESSEE AND SMT SUNITA PURI, LEARNED CIT DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE SOCIETY WAS SET UP BY THE GOVERNMENT OF HARY ANA AND ITS MAIN OBJECTS ARE TO DRAW PLANS FOR WATER UTILIZATION AND INT EGRATED AREA DEVELOPMENT IN IRRIGATION INCLUDING MODERNIZATION OF W ATER DISTRIBUTION SYSTEM / MAINTENANCE AND OPERATION OF IRRIGATION SYST EM. IT WAS FURTHER PLEADED THAT NO NON-CHARITABLE ACTIVITY WAS D ONE BY THE ASSESSEE. OUR ATTENTION WAS ALSO INVITED TO PAGE 16 & 18 OF THE PAPER BOOK. ON THE OTHER HAND, THE LEARNED CIT DR CONTENDE D THAT NO SUCH ACTIVITY, AS CLAIMED WAS DONE BY THE ASSESSEE AND T HE STATED OBJECTS WERE NEVER CARRIED OUT, THEREFORE, THE DENIAL OF REGISTRATI ON UNDER SECTION 12 A OF THE ACT WAS DEFENDED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON THE FILE. BRIEF FACTS ARE THAT THE ASSESSEE SOCIETY WAS ESTABLISHED ON 19.8.1994 BY GOVERNMENT OF HARYAN A AND ITS MAIN OBJECTS WERE CLAIMED TO BE AS UNDER:- I) TO DRAW PLANTS FOR WATER UTILIZATION AND INTEGRATED AREA DEVELOPMENT IN THE IRRIGATION COMMAND, INCLUDING MODERNIZATION OF THE DISTRIBUTION SYSTEM, THE PROVISION OF DRAINAGE AND THE MAINTENANCE AND OPERATION OF BOTH THE DISTRIBUTION AND DRAINAGE SYSTEMS, AND INVESTMENT AND PRODUCTION ACTIVITIES TO BE PAGE 5 OF 16 UNDERTAKEN BY THE FARMERS WITHIN ITS AREA OF OPERATION: II) TO EXECUTE THE ABOVE PLANTS FOR THE BENEFITS OF THE FARMERS EITHER DIRECTLY OR THROUGH THE BENEFICIARIES OF THOUGH OTHER SOURCES. III) TO REVIEW THE PROGRESS OF THE EXECUTION OF THE VARIOUS SCHEMES UNDERTAKEN AND THE EVALUATION THEREOF. B) TO ATTAIN THE ABOVE MAIN OBJECTIVES, THE SOCIETY MAY TAKE UP THE FOLLOWING ACTIVITIES/PROGRAMMES: I) MODERNIZATION, MAINTENANCE OF THE MAIN AND INTERMEDIATE DRAINAGE SYSTEM. II) DEVELOPMENT AND MAINTENANCE OF THE MAIN AND INTERMEDIATE DRAINAGE SYSTEM. III) DIGGING AND DEVELOPMENT OF FIELD CHANNELS AND FIELD DRAINS WITHIN THE COMMAND. IV) LAND LEVELING FOR THE TYPE OF IRRIGATED CROP THAT IS T O BE GROWN. V) CONSOLIDATION OF HOLDINGS AND RE-DRAWING OF FIELD BOUNDARIES IN THE COMMAND AREA. VI) ENFORCEMENT OF A PROPER SYSTEM OF BARABANDI AND FAIR DISTRIBUTION OF WATER TO INDIVIDUAL FIELDS. VII) DEVELOPMENT OF GROUNDWATER OF SUPPLEMENT SURFACE IRRIGATION. VIII) SELECTION AND INTRODUCTION OF SUITABLE CROPPING PATTE RN. PAGE 6 OF 16 IX) SUPPLY OF INPUTS AND SERVICES, INCLUDING CREDIT. X) DEVELOPMENT OF MARKETING AND PROCESSING FACILITIES AN D COMMUNICATIONS. XI) PREPARING INDIVIDUAL PROGRAMMES OF ACTION FOR SMALL FARMERS, MARGINAL FARMERS AND AGRICULTURAL LABOUR. XII) TO GIVE SUCH ASSISTANCE TO SMALL AND MARGINAL FARMERS AND OTHER DISADVANTAGEOUS FARMERS INCLUDING GRANTS AS MAY BE NECESSARY FOR FURTHERING THE PURPOSES OF THE PLANS AND SCHEMES UNDERTAKEN OR SUPPORTED BY THE SOCIETY. XIII) DIVERSIFICATION OF AGRICULTURE AND DEVELOPMENT OF ACTIVITIES LIKE ANIMAL HUSBANDRY INCLUDING SHEEP BREEDING, POULTRY DIARY AND FARM FORESTRY. XIV) SOIL CONSERVATION AND AFFORESTATION. XV) TO TRAIN FARMERS. XVI) TO ORGANIZE AGRICULTURAL EXTENSION SERVICES, FARMERS SERVICES, FARMERS SERVICES SOCIETIES ETC. XVII) TO PURCHASE, TAKE ON LEASE, ACCEPT AS GIFT, CONSTRUCT OR OTHERWISE ACQUIRE ANY PROPERTY WHICH MAY BE NECESSARY OR USEFUL FOR THE SOCIETY. XVIII) TO RECEIVE/RAISE LOANS FOR THE PURPOSES OF THE SOCIETY . PAGE 7 OF 16 XIX) TO EMPLOY DIRECTLY OR INDIRECTLY BY GIVING GRANTS TO OT HER INSTITUTIONS/DEPARTMENTS OF THE GOVERNMENT, PERSONS TO FURTHER THE PROGRAMMES TO BE UNDERTAKEN/SUPPORTED BY THE SOCIETY. XX) TO SET UP OR ESTABLISH ANY SPECIAL SERVICE SUCH AS A DISPENSARY, LABORATORY OR PROCESSING PLANT ETC., IN FURTHERANCE OF THE OBJECTIVES OF THE SOCIETY. XXI) TO SELL, LEASE, EXCHANGE AND OTHERWISE TRANSFER ANY PROPERTY OF THE SOCIETY OR PORTION THEREOF. XXII) TO SELL, LEASE EXCHANGE AND OTHERWISE TRANSFER ANY PROPERTY OF THE SOCIETY OR PORTION THEREOF. 3. THE ASSESSEE MOVED APPLICATION BEFORE THE LEARNE D COMMISSIONER FOR GRANT OF REGISTRATION UNDER SECTIO N 12A BY CLAIMING THAT THE OBJECTS SQUARELY FALLS WITHIN THE SCOPE AS LAID DOWN UNDER SECTION 2 (15) OF THE ACT. AS CLAIMED BY THE ASSESSEE, THE NECESSARY DETAILS INCLUDING BOOKS OF ACCOUNT / FINANCIAL STATEMENTS WERE DULY FURNISHED BEFORE THE LEARNED COMMISSIONER. HOWEVER, THE LEARNED COMMISSIONER E XAMINED THE INCOME AND EXPENDITURE STATEMENT OF THE ASSESSE E AND WAS OF THE VIEW THAT THE INCOME CREDITED IN EXPENDITURE ACCOUNT DOES NOT RELATE TO ANY VOLUNTARY CONTRIBUTION EITHER, TH EREFORE, THE SAID INTEREST INCOME IS TAXABLE, CONSEQUENTLY, DOES NOT FALL WITHIN THE PURVIEW OF SECTION 12(1) OF THE ACT, THEREFORE, THE REGISTRATION UNDER SECTION 12AA (1)(B) WAS DENIED, WHICH IS UNDE R CHALLENGE PAGE 8 OF 16 BEFORE THIS TRIBUNAL. BEFORE COMING TO ANY CONCLU SION, WE ARE REPRODUCING HEREWITH SUB CLAUSE (15) OF SECTION 2 O F THE ACT. CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDU CATION, MEDICAL RELIEF, [ PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORI C INTEREST, ] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURP OSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY;] IF THE AFORESAID SECTION IS ANALYSED, THE CHARITABL E PURPOSES INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL REL IEF AND PRESERVATION OF ENVIRONMENT INCLUDING WATER SHEDS F OREST AND WILD LIFE AND THE ADVANCEMENT OF ANY OTHER OBJECTS OF GE NERAL PUBLIC UTILITY SUBJECT TO PROVISO THAT IT SHOULD NOT INCLU DE ANY TRADE COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A C ONSIDERATION. 4. IF THE AFOREMENTIONED OBJECTS OF THE SOCIETY ARE K EPT IN JUXTAPOSITION WITH THE REQUIREMENT OF SUB CLAUSE (15) TO SECTION 2 OF THE ACT, WE HAVE NOT FOUND ANY ACTIVITY, WHICH IS OF NO N-CHARITABLE NATURE. PAGE 9 OF 16 THE CONDITION UNDER SECTION 12A FOR APPLICABILITY OF SECTIONS 11 & 12 OF THE ACT ARE AS UNDER:- 12A. [(1)] THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUS T OR INSTITUTION UNLESS THE FOLLOWING CONDITIONS ARE FULF ILLED, NAMELY: (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE A N APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE [***] COMMISSIONER BEFORE THE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, [WHICHEVER IS LATE R AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA ] : [ PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF TH E PERIOD AFORESAID, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST O R INSTITUTION, (I) FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION IF THE COMMISSIONER IS, FOR REASONS TO BE RECORDED IN WRITING, SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PERIOD AFORESAID FOR SUFFICIENT REASONS; (II) FROM THE 1ST DAY OF THE FINANCIAL YEAR IN WHICH THE APPLICATION IS MADE, IF THE COMMISSIONER IS NOT SO SATISFIED:] (III) PAGE 10 OF 16 [ PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007;] [(AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTIO N ON OR AFTER THE 1ST DAY OF JUNE, 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA ;] (B) WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUT ION AS COMPUTED UNDER THIS ACT WITHOUT GIVING EFFECT TO [TH E PROVISIONS OF SECTION 11 AND SECTION 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME- TAX IN ANY PREVIOUS YEAR], THE ACCOUNTS OF THE TRUST OR INSTITUTION FOR THAT YEAR HAVE BEEN AUDITED BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB- SECTION (2) OF SECTION 288 AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES ALONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED.] (C) [(2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SU CH APPLICATION IS MADE.] 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A , SHALL PAGE 11 OF 16 (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUS T OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE M AY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, 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 INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPL ICANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONA BLE OPPORTUNITY OF BEING HEARD. (1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF COMMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER 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 ST AGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [ OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A .] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) AND SUBSEQUENTLY THE COMMISSIONER IS SATISFIED THAT THE PAGE 12 OF 16 ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUI NE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIV EN A REASONABLE OPPORTUNITY OF BEING HEARD.] AN AMENDMENT WAS MADE IN THE FINANCE ACT, 2008 W.E. F. 1.4.2009 I.E. FOR ASSESSMENT YEARS 2009-10 TO EXCLU DE THE ACTIVITIES OF TRADE, COMMERCE OR BUSINESS FROM THE AMBIT OF CHARITABLE PURPOSES IN RELATION TO CESS OR FEE OR A NY OTHER CONSIDERATION IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF INCOME FROM SUCH ACTIVITIES. THE DEFI NITION WAS FURTHER AMENDED FROM ASSESSMENT YEAR 2009-10 SO AS TO SEPARATELY LIST THE PRESERVATION OF ENVIRONMENT INC LUDING WATER SHEDS FOREST AND WILD LIFE. THE ACTIVITIES OF THE ASSESSEE ARE TO BRIDGE THE GAP BETWEEN THE IRRIGATION POTENTIAL CRE ATED AND UTILIZED THROUGH MICRO LEVEL INFRASTRUCTURE DEVELOP MENT AND EFFECTIVE FARM WATER MANAGEMENT TO ENHANCE AGRICULT URAL PRODUCTION / PRODUCTIVITY SO THAT THE SOCIO ECONOMI C CONDITIONS OF THE FARMERS MAY IMPROVE. EVEN OTHERWISE, FOR THE PURPOSES OF SECTION 12AA OF THE ACT, THE LEARNED COMMISSIONER A T THE STAGE OF REFUSING OR GRATING REGISTRATION IS NOT SUPPOSE TO EXAMINE AS TO PAGE 13 OF 16 WHAT AMOUNT SHOULD FORM CORPUS OF TRUST AND WHAT AM OUNT SHOULD APPEAR IN BALANCE SHEET OF THE ASSESSEE AND ALSO IN WHAT MANNER ACCOUNTS RELATING TO PERIOD PRIOR AND POST C ONSTITUTION OF TRUST SHOULD BE MAINTAINED BECAUSE AS PER SECTION 1 2AA READ WITH RULE 17-A, THE LEARNED COMMISSIONER IS SUPPOSE D TO SATISFY HIMSELF AS TO WHETHER OBJECTS AND GENUINENESS OF AC TIVITIES OF TRUST ARE CHARITABLE OR RELIGIOUS OR NOT. OUR VIE W IS FORTIFIED BY THE DECISION IN SHRI SAIN JI DHARMARATH TRUST VS. CIT ( 2006) 8 SOT 446 (DEL.), DHARMA SANSATHAPAK SANGTH (NIYAS) VS. C IT (2009) 28 SOT 1 (DEL.) URO, CIT VS. RADHA SWAMY SATSANG (2 01 ITR 493)(ALL), HAZRAT PIR MOHD. SAHA SAHIB ROZA COMMITT EE VS. CIT (63 ITR 490)(SC), SHRI SAI SAMPARAN TRUST COMPANY V S. CIT (2009) 27 SOT 423(DEL.). WHILE CONSIDERING THE AP PLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12A, ALL THAT T HE COMMISSIONER MAY EXAMINE IS WHETHER THE APPLICATION IS MADE IN A CCORDANCE WITH THE REQUIREMENT OF THAT SECTION READ WITH RULE 17A AND ALSO WHETHER FORM NO. 10-A HAS BEEN PROPERLY FILLED UP. HE MAY ALSO SEE THE OBJECTS OF THE TRUST BUT IT IS NOT PROPER T O EXAMINE APPLICATION OF INCOME AS WAS HELD IN 5 TH GENERATION EDUCATION SOCIETY VS. CIT (185 ITR 634)(ALL). IN THE LIGHT O F THIS DISCUSSION AND JUDICIAL PRONOUNCEMENTS, WE ARE REPRODUCING HER EWITH THE CONCLUDING PARA OF THE IMPUGNED ORDER: PAGE 14 OF 16 IN REALITY, IT IS SEEN THAT THE ASSESSEE SOCIETY IS MERELY AN EXTENSION / DEPARTMENT OF THE STATE GOVT OF HARYANA. THIS IS ALSO EVIDENT FROM THE SANCTION ORDER OF THE GRANT IN AID ORDERS REFERRED ABOVE. HAVING REGARD TO THE OBJECTS OF THE SOCIETY AND THE FACTS AS ABOVE, I AM SATISFIED THAT THE ASSESSEE SOCIETY IS NOT HAVING ANY CHARITABLE ACTIVITY WITH THE MEANING OF 2(`15) OF THE I.T. ACT, 1961 READ WITH SECTION 12(1) OF THE I.T.ACT, 1961 CARRIED OUT DURING THE PERIOD 1.4.2005 TO 31.3.2008 AND REGISTRATION UNDER SECTION 12AA(1)(B) CANNOT BE ACCORDED TO AND THE APPLICATION IS ACCORDINGLY DISMISSED. IF THE AFORESAID CONCLUSION IS ANALYSED, IT MERELY SAYS THAT THE ASSESSEE SOCIETY IS EXTENSION OF GOVERNMENT OF HARY ANA AND IS NOT HAVING ANY CHARITABLE ACTIVITY WITHIN THE MEANI NG OF SECTION 2(15) READ WITH SECTION 12(1) OF THE ACT. WE ARE NOT IN AGREEMENT WITH SUCH FINDING FIRSTLY BECAUSE THERE I S A NO BAR THAT ANY DEPARTMENT OF THE STATE, IF ANY, HAVING ACTIVIT IES OF CHARITABLE NATURE, CANNOT BE GRANTED REGISTRATION AND SECONDLY , IF THE OBJECTS AND ACTIVITIES ARE ANALYSED, IT CLEARLY FALLS WITHI N THE AMBIT OF CHARITABLE ACTIVITIES OF GENERAL PUBLIC UTILITY. I T IS NOT THE CASE THAT THE FUNDS HAVE BEEN MISUSED IN ANY MANNER. IN THE LIGHT OF THESE FACTS AND THE JUDICIAL PRONOUNCEMENTS, DISCUS SED ABOVE, WE ARE OF THE VIEW, THAT IT IS A FIT CASE FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. THE LEARNED COMMI SSIONER IS DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PAGE 15 OF 16 4. IN THE PRESENT APPEAL, THE OBJECTS/AMENDED OBJEC TS OF THE ASSESSEE ARE AS UNDER: 1- EFGYK FK{KK ,OA JKSTXKJ EWYD IZFK{K.KKSA DKS V K;KSTU A 2- EFGYK MRIHMU DH JKSD GSRQ EFGYKVKSA ESA TKX`FR Y KUK A 3- LEKT MRFKKU GSRQ EFGYKVKSA DH HKKXHNKJH C