M/S CARE AND SHARE WELFARE SOCIETY , LUDHIANA V. COMMISSIONER OF INCOME TAX, (EXAMPTION), CHANDIGARH

ITA 694/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3332 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-05-2018
• Assessment Year: 2017-2018
• Appeal Filed On: 09-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP C HAUHAN LD
• Assessee Lawyers: SUNIL KUMAR MUKHI LD
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.694(ASR)/2017 ASSESSMENT YEAR:2017-18 CARE & SHARE WELFARE SOCIETY C/O INTERNATIONAL MARKETING CORPORATION, GURU NANAK DEV BHAWAN, NEAR BHARAT NAGAR CHOWK, LUDHIANA PAN:AACAC6608D VS. THE CIT, (EXEMPTION) CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY: SH SUNIL KUMAR MUKHI (LD. ADV .) RESPONDENT BY: SH. SANDEEP CHAUHAN(LD. DR) DATE OF HEARING: 31.05.2018 DATE OF PRONOUNCEMENT: 27.06.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORD ER DATED 29.09.2017, IMPUGNED HEREIN, PASSED BY THE LD. CIT, (EXEMPTIONS), CHANDIGARH, U/S 12AA(1)(B)(II) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1(A) THAT THE LD. CIT(E) IS NOT JUSTIFIED IN NOT G RANTING REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 WHICH IS ILLEG AL, WITHOUT JURISDICTION, ARBITRARY AND THUS BAD IN LAW AND SO NEEDS TO BE QUASHED AND ACCORDINGLY REGISTRATION U/S 12AA OF IN COME TAX ACT, 1961 NEEDS TO BE ALLOWED. ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 2 (B) THAT THE LEARNED CIT(EXEMPTIONS) HAS REJECTED T HE OBJECTS OF THE SOCIETY BY NOT CONSIDERING THEM AS CHARITABLE W ITHOUT GIVING SUFFICIENT OPPORTUNITY OF HEARING TO APPELLANT SOCI ETY. 3 THE BRIEF FACTS OF THE CASE ARE THAT AN APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT WAS FILED BEFORE TH E LD. CIT(E) ON 7 TH MARCH, 2017 WHICH CAME UP FOR CONSIDERATION ON 2 ND AUGUST, 2017 AND THE ASSESSEE SOCIETY WAS REQUESTED TO FILE THE DETAILS /CLARIFICATIONS AS ENUMERATED IN PARA NO.5 OF THE ORDER, ON DATED 16.08.2017 WHICH WAS REPLIED BY THE ASSESSEE SOCIETY VIDE LETTER DATED 16.08.2017. ALTHOUGH THE REPLY ALONG W ITH DOCUMENTS OF THIS ASSESSEE SOCIETY WAS CONSIDERED BY THE LD. CIT(E), HOWEVER, THE REGISTRATION WAS DECLINED MAINLY ON THE GROUND THAT NO CHARITABLE ACTIVITY HAS BEEN CONDUCTED BY THE APPELLANT SOCIETY SINCE ITS INCEPTION EXCEPT PURCHASING LAND WORTH OF RS.1,04,48,900/- FOR ITS FUTURE PLAN FOR CONST RUCTING THE HOSPITAL. SECONDLY, IT WAS OBSERVED BY THE LD. CIT(E) TH AT THE LOAN OF RS.1.06 CRORES TAKEN BY THE APPLICANT SOCIETY FR OM THE RELATIVE OF THE SOCIETY INEXTRICABLY LINKED LOAN GIVE RS AND OFFICE BEARERS OF THE SOCIETY AND EVEN NO DETAILS WHETHER THE LOAN IS INTEREST BEARING OR FREE OF INTEREST HAS BEEN PROVIDED BY THE ASSESSEE SOCIETY, THEREFORE IN ABSENCE OF THE SAME IT MIGHT BE CONSTRUED AS AN ARRANGEMENT DESIGNED TO PAY THE LOAN GI VER FROM RECEIPTS THAT WOULD BE CLAIMED AS CHARITABLE AND W OULD BE PUBLIC MONEY. FURTHER, IT WAS ALSO OBSERVED THAT IN CL AUSE NO. 9 OF THE OBJECT CLAUSE, THERE IS NO MENTION AT ALL QUA A CQUISITION OF ANY LAND FOR A HOSPITAL AND MORE OVER FROM THE OTHER CLAUSES (POINT NO. 1 TO 5 & 7) IT REVEALS THAT THE PREDOMINA NT OBJECT OF ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 3 THE ASSESSEE SOCIETY IS IN THE FIELD OF THE EDUCATION AND T HERE IS NO MENTION OF OPENING A HOSPITAL IN THE OBJECT CLAUSE. FINALLY, IT WAS OBSERVED BY THE LD. CIT(E) THAT THE WHOLE BUSINESS O F CREATING A SOCIETY TRANSFERRING A HUGE SUM OF RS.1.06 CROR ES FROM RELATED COMMERCIAL CONCERN, PURCHASE OF LAND WITH TH E INVOLVEMENT OF THE FAMILY MEMBERS WITHOUT CARRYING OU T ANY CHARITABLE ACTIVITY AS PER OBJECT CLAUSE OF THE MOA AND F OR PURPOSE I.E., NOT CONTENDED OR ALLOWED BY THE OBJECTS CL AUSE OF THE MOU, DO NOT ENTHUSE CONFIDENCE IN RESPECT OF THE APP LICANT VIZ. A VIZ. ITS CLAIMS ABOUT BEING CHARITABLE AND NEIT HER THE OBJECTS NOR THE GENUINENESS OF ITS ACTIVITY GET CORROBORA TED IN THE INSTANT CASE. OUR ATTENTION WAS DRAWN BY THE LD. AR TO THE AMENDED AIMS AND OBJECTS OF THE SOCIETY WHICH REFLECTS FROM CLAUSE N O.(1) REPRODUCED HEREIN BELOW FOR THE SAKE OF CONVENIENCE A ND BREVITY. TO OPEN AN EDUCATIONAL/MEDICAL AND RESEARCHES INSTITUTIONS/HOSPITALS FOR THE HEALTH AND WELFARE O F MANKIND. WE ALSO PERUSED THE CERTIFIED COPY OF MINUTES OF MEETI NG HELD ON 06.11.2017 AT SOCIETY OFFICE OF THE ASSESSEE WHERE THE PROPER AMENDMENT IN MOA HAS ALREADY BEEN MADE AND VI DE APPLICATION DATED 17.01.2018 FORWARDED TO THE ASSISTAN T REGISTRAR OF THE SOCIETY CUM DISTRICT MANAGER, DISTRICT I NDUSTRY CENTER, LUDHIANA FOR APPROPRIATE IN-CORPORATION. FRO M THE AMENDED MOA AIMS AND OBJECTS OF SOCIETY, CLAUSE NO.9 REFLE CTS ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 4 TO ACQUIRE LAND AND BUILDING FOR THE CONSTRUCTION A ND MAINTAINS OF HOSPITALS, MEDICAL INSTITUTIONS, SCHOOLS, COLLEGES, HOSTEL S AND MAINTAINS OF OFFICES AND CENTERS OF THE SOCIETY. FROM TH E AMENDED AIMS AND OBJECTS OF THE SOCIETY IT IS CLEAR THAT T HE OBJECTION OF THE LD. CIT(E) TO THE EFFECT THAT THERE IS NO MENTION AT ALL IN RESPECT OF ACQUISITION OF ANY LAND FOR A HOSPI TAL, HAS ALREADY BEEN METED OUT BY THE ASSESSEE SOCIETY. THEREFORE , THE SAID GROUND FOR REJECTION OF APPLICATION DOES NOT SURVIV E. 3.1 SECOND MAIN GROUND WITH REGARD TO THE INEXTRICABLE LINK BETWEEN THE LOAN GIVER AND OFFER BEARER OF THE SOCIET Y, WE REALIZED THAT THERE IS NO EMBARGO UNDER THE ACT THAT SUCH PERSONS CANNOT BE RELATED TO EACH OTHER BY BLOOD OR OTH ERWISE. OUR VIEW EVEN FORTIFIED BY THE JUDGMENT PASSED BY THE DELHI HIGH COURT IN THE CASE OF VISWAMOHAN GUPTA VS. REGISTRAR OF SOCIETY, IN WRIT PETITION NO.6965/2011 DATED 2 ND MAY, 2012. 3.2 THE THIRD REASON FOR REJECTION OF REGISTRATION BY THE CIT(E) WAS THAT NO CHARITABLE ACTIVITY HAS BEEN CONDUCTE D BY THE APPLICANT SOCIETY SINCE ITS INCEPTION EXCEPT PURCHASING LAN D. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THIS REASON OF REJECTION. IN THE INSTANT CASE THE SOCIETY HAS BEEN FORMED ONLY 19.08.2016 AND THEREAFTER APPLICATION FOR REGISTRATIO N WAS FILED ON 7 TH MARCH, 2017 AND THE ORDER WAS PASSED ON 29 TH SEP. 2017 WHICH GOES TO SHOW THAT SOCIETY CAME IN EXISTENCE RECENTLY ONLY WHICH CLEARLY SPELL OUT THAT THE ASSESSEE SOCIETY IS AT A N ASCENT STAGE AND WE CANNOT EXPECT THE SOCIETY TO START ITS OPERAT ION IN ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 5 HIGH PEDESTAL AT THE BEGINNING ITSELF. THE ASSESSEE SOCIETY HAS ALREADY PURCHASED THE LAND AND IS IN THE PROCESS OF CONSTRU CTING HOSPITAL FOR WHICH SITE PLAN HAS ALREADY BEEN PREPARED AND PLACED BEFORE THE LD. CIE(E) AS WELL AS BEFORE US FOR P ERUSAL WHICH FURTHER STRENGTHEN THE CONTENTION OF THE ASSESSEE TH AT THE PURCHASE OF LAND FOR CONSTRUCTION OF HOSPITAL AND STARTING PROCESS FOR CONSTRUCTION OF HOSPITAL IS CERTAINLY IN PURSUANCE TO TH E AIMS AND OBJECTIONS OF THE SOCIETY. THE CO-ORDINATE BENCH AT AMRITSAR, IN THE CASE OF SANT ISHWAR SHIKSHA SAMITI, JAMMU AND SANT ISHWAR FOUNDATIO N ( ITA NO.670(ASR)/2015 & ITA NO.671(ASR)/2015, DECIDED O N 30- 08-2017 ) , WHILE DEALING WITH THE SIMILAR AND IDENT ICAL ISSUE, WHERE THE SOCIETY WAS AN NASCENT STAGE, ANALYZED THE POSIT ION OF LAW AS WELL AS ISSUE IN HAND. RELEVANT PART OF THE SAID DECISION IS REPRODUCED HEREIN BELOW. 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUM STANCES OF THE CASE AND ALSO RIVAL SUBMISSIONS OF THE PARTIES, RELEVANT DATES ARE VERY MUCH MATERIAL IN THE INSTANT CASE. THE TRU ST WAS ESTABLISHED AND REGISTERED ONLY ON 12 TH MARCH, 2015 AND THEREAFTER, APPLICATION FOR REGISTRATION U/S 12A WAS FILED ON 2 9.04.2015 AND MAIN OBJECTS OF THE TRUST ARE ESTABLISHMENT OF EDUC ATIONAL INSTITUTION AND/OR MAINTENANCE OF EDUCATIONAL INSTITUTION ,MEDI TATION AND PRAYER HALLS, GRANTING OF SCHOLARSHIP AND FINANCIA L ASSISTANCE TO NEEDY FOR EDUCATIONAL PURPOSES AND ESTABLISHMENT OF HOSPITALS AND NURSING HOMES ETC. WHICH ARE COVERED UNDER THE DIME NSION 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 ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 6 (1) THE CHIEF COMMISSIONER OR COMMISSIONER, ON RECE IPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUT ION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1) ] OF SECTION 12A , SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES 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 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 APPLICANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSE D UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION WHICH THE APPLICATION WAS RECEIV ED UNDER CLAUSE (A) OF SECTION 12A.] FROM THE CONTENTS OF THE SEC.12AA, IT ENCOMPASS THA T THE LD. CIT(E) IN ORDER TO SATISFY HIMSELF ABOUT THE GENUIN ENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION CAN CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THI NKS NECESSARY AND ALSO EMPOWERED TO MAKE SUCH ENQUIRY AS HE MAY DEEM FIT NECESSARY IN THIS BEHALF. SECOND CLAUSE DEALS WITH THAT AFTER SATISFYING HIMS ELF ABOUT THE OBJECT OF THE TRUST OR INSTITUTION AND THE GENU INENESS OF THE ACTIVITIES, HE SHALL PASS ORDER IN WRITING EITHER T O 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 ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 7 NO.1687/2010 , DECIDED ON DATED 16.08.2012 DEALT WI TH THE SAME SITUATION AND OBSERVED AS UNDER: THAT THE CONCERN CIT IS NOT REQUIRED TO EXAMINE TH E QUESTION WHETHER THE TRUST HAS ACTUALLY COMMENCED AND HAS, I N 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 T O REJECT ITS APPLICATION FOR REGISTRATION ON THE GROU ND THAT THE TRUST HAS FAILED TO CONVINCE HIM ABOUT THE GENUINEN ESS OF THE ACTIVITIES. THAT IS WHAT UNFORTUNATELY THE COMMISSI ONER DID IN THE PRESET CASE '. FURTHER, ALLAHABAD HIGH COURT IN THE CASE OF HARDA YAL 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 LOOK IN TO THE ACTIVITIES, WHERE SUCH ACTIVITIES HAVE NOT OR ARE I N 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 RECEIVES DONATION S, THE REGISTRATION U/S 12AA CANNOT BE REFUSED, ON THE GRO UND THAT THE TRUST HAS NOT YET COMMENCED THE CHARITABLE OR R ELIGIOUS ACTIVITY' . FURTHER, CO-ORDINATION BENCH OF ITAT, AMRITSAR IN THE CASE OF EK UMEED WELFARE SOCIETY, FAZIKA VS. ASSESSEE IN IT A NO.615(ASR)/2013 'DIRECTED TO GRANT REGISTRATION TO THE SOCIETY WHER E THE REGISTRATION WAS DENIED BY THE CIT ON GROUND OF NEG LIGIBLE ACTIVITY TILL THE DATE OF REGISTRATION'. ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 8 LET US TO CONSIDER REASONS FOR REJECTION OF APPLI CATION FOR GRANT OF REGISTRATION U/S 12 AA OF THE ACT: FIRST REASON FOR DENIAL OF REGISTRATION BY THE LD. CIT WAS THAT THAT THE ASSESSEE TRUST HAS NOT CARRIED OUT ANY ACT IVITY. SECOND REASON THAT THE ASSESSEE TRUST HAS INITIALLY DECIDED TO CONSTRUCT SCHOOL & MEDITATION HALL AT ASAR 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 HAS BE EN CARRIED OUT BY THE ASSESSE TRUST , ON THE OTHER HAND HAS DOUBTED T HE 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 NASCENT STAGE AND HAS NOT CARRIED OUT ANY ACTIVITY EXCEPT TO MAKE EFFORTS FOR PROCUR ING LAND FOR SCHOOL , HOWEVER LATER ON PURCHASED THE LAND FOR SCHOOL AT NIABHAT, NAGROTA , WHICH CLEARLY SHOWS THE INTENTION OF THE TRUST AS THE MAIN OBJECT OF THE TRUST IS TO ESTABLISH SCHOOLS ETC. A ND TO PROVIDE EDUCATION, THEREFORE, ONE CAN EXPECT FROM THE TRUST TO DO ACTIVITY OF THE CHARITY IMMEDIATELY AND IN THAT SITUATION THE A UTHORITY CANNOT COME TO THE CONCLUSION THAT THE INTENT CONTAINED IN THE OBJECTS OF THE TRUST DO NOT FIND CORROBORATION IN THE SHAPE OF ANY POSITIVE ACTION TAKEN TOWARDS EITHER EDUCATION OR ANY OF THE OTHER OBJECTS 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 BASE REJECTION OF THE REGISTRATION BECAUSE THE REVENUE AUTHORITY IS AT LI BERTY TO WITHDRAW AND/OR TO CANCEL THE REGISTRATION AN ANY TIME ON TH E SPECIFIED REASONS ENUMERATED IN THE ACT. FURTHER FROM THE DOCUMENTS FILED BEFORE US, IT REFL ECTS THAT THE ASSESSEE TRUST HAS ALREADY PURCHASED THE LAND WHICH IS 9 KANALS 19 MARLAS SITUATED AT VILLAGE BALIAN, TESHIL UDHAMP UR, AND FURTHER ALSO GOT APPROVED SANCTIONED PLAN FOR CONSTRUCTION OF SCHOOL FROM THE CONCERNED EXECUTIVE ENGINEER OF THE AREA , NO OBJECTION FOR CONSTRUCTION FROM THE CONCERNED PANCHAYAT AND CONST RUCTION OF SCHOOL IS AT ADVANCE STAGE AND ALSO EXECUTED MEMOR ANDUM OF ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 9 UNDERSTANDING WITH THE BHARTIYA SHIKSHA SAMITI, WHI CH IS INVOLVED IN THE FIELD OF IMPARTING FORMAL EDUCATION HAVING ESTABLISHED A NUMBER OF PRIMARY AND SECONDARY LEVEL SCHOOLS IN D IFFERENT PART OF JAMMU & KASHMIR AS SUBMITTED . FURTHER FROM THE CUTTING OF NEWSPAPERS, IT REFLEC TS THAT INAUGURATION FOR CONSTRUCTION AND LAYING STONE FOR ESTABLISHMENT OF THE SCHOOL HAS ALREADY BEEN DONE AND AS PER COMPUTA TION OF INCOME OF ASST. YEAR: 2016-17 IT REFLECTS THAT THE ASSESSE E TRUST HAS RECEIVED RS.1,80,52,900/- AS VOLUNTARILY CONTRIBUTI ON AND DURING THE FINANCIAL YEAR THE ASSESSEE TRUST HAS INCURRED THE EXPENDITURE OF RS.13089100 AND RS.379000 FOR THE PURCHASE OF TH E LAND AND ITS CONSTRUCTION FOR SCHOOL PURPOSES, AND FURTHER INCOM E AND EXPENDITURE FOR THE PERIOD ENDED 31 ST MARCH, 2016 SHOWS THAT THE ASSESSEE TRUST HAS CONTRIBUTED RS.11,000/- TO THE P .M. RELIEF FUND AND RS. 9,472/- FOR CLEANING MOMENT AT KATRA AND RS .5,640/- FOR THE ENVIRONMENT AWARENESS AND RS.8,548/- FOR MEDICA L CARE AT FDR. ON PERUSAL OF RECORDS AND JUDGMENTS, IT IS CLEAR T HAT AT THE TIME OF REGISTRATION U/S 12AA OF THE ACT, THE LD. C IT(E) IS REQUIRED TO SEE THE OBJECTS OF THE TRUST OR INSTITUTIONS AND GE NUINENESS OF ITS ACTIVITIES, HOWEVER, IF WE COME TO THE INSTANT CASE , THEN IT IS NOT DISPUTED THAT THE TRUST WAS FORMED AND REGISTERED O NLY ON 12 TH MARCH, 2015 THEREAFTER, APPLICATION FOR REGISTRATIO N U/S 12AA WAS FILED ON 15.05.2015 AND THE IMPUGNED ORDER WAS PASS ED 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 ESTABLISHMENT OF THE SCHOOL AND FURTHER BECAUSE THE ASSESSEE TRUST WAS AT NASCENT STAGE, THEREFORE, COULD NOT CARRY AN Y ACTIVITY AND ACCORDING TO AFORESAID JUDGMENTS IT IS CLEAR THAT S TATUTE DOES NOT PRESCRIBE A WAITING PERIOD FOR A NEWLY REGISTERED T RUST TO QUALIFY ITSELF FOR REGISTRATION UNDER SECTION 12AA OF THE A CT AND WAIT TILL THE ACTIVITY COMMENCE. FROM THE CONJOINT READING OF THE AFORESAID JUDGMENTS, IT CAN BE SAFELY CONCLUDED THAT EVEN OTH ERWISE IF NO ACTIVITY WAS CARRIED OUT BY A TRUST OR INSTITUTION , 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 AP PLICATION OF THE ASSESSEE , THE ASSESSEE HAS CARRIED OUT MANY ACTIVI TIES AND THEIR GENUINENESS WERE IN DOUBT BUT IN THE INSTANT CASE GRIEVANCE OF THE CIT(E) IS ONLY THAT THERE WAS NO ACTIVITY CARRIED O UT BY THE ASSESSEE. ALTHOUGH FORM THE DOCUMENTS SUBMITTED BEFORE US POS ITIVELY REFLECTS THAT THE ASSESSEE TRUST HAS CARRIED OUT MA NY ACTIVITIES IN FURTHERANCE OF OBJECTS OF THE TRUST, HOWEVER BECAUS E THE SAME ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 10 ACTIVITIES HAVE NOT BEEN CARRIED OUT AND DOCUMENTS WERE ALSO NOT SUBMITTED BEFORE THE LD. CIT (E ) TILL THE DATE OF ADJUDICATION OF APPLICATION , HENCE WE ARE NOT TAKING INTO CONSIDER ATION THE SAID DOCUMENTS AND FACTS , HOWEVER IN OVERALL CONSIDERAT ION OF THE JUDICIAL INTERPRETATION , PECULIAR FACTS AND CIRCUM STANCES AND SITUATION, IN OUR CONSIDERED OPINION THE LD. CIT(A) WAS UNDER OBLIGATION TO CONSIDER THE OBJECTS OF THE TRUST WHI CH ARE AVAILABLE IN THE TRUST DEED ITSELF. EVEN OTHERWISE, THE CONCERNE D 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 A CTIVITIES. ALTHOUGH, IN THE OPEN COURT WE HAD SHOWN OUR INCLI NATION TO REMAND THE CASE WITH DIRECTION TO THE ASSESSEE TO A PPROACH THE LD. CIT(E) WITH THE DOCUMENTS AS SUBMITTED BEFORE THIS FORUM BECAUSE THE DOCUMENTS 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 AP PLICATION U/S 12AA OF THE ACT, THE TRUST WAS AT NASCENT STAGE AND ALL THE ACTIVITIES WHICH ARE REFLECTING FROM THE DOCUMENTS SUBMITTED H EREIN ARE OF THE LATER STAGE, HOWEVER, IN OUR CONSIDERED OPINION AT THE TIME OF DISPOSAL OF APPLICATION, THE LD. CIT(E) IN ORDER T O SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUS T OR INSTITUTION CAN CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRU ST OR INSTITUTION AS HE THINKS NECESSARY AND ALSO EMPOWERED TO MAKE S UCH ENQUIRY AS HE MAY DEEM FIT NECESSARY IN THIS BEHALF , SECON DLY 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 INS TITUTIONS. IN THE INSTANT CASE NO ACTIVITY WAS CARRIED OUT THEREFORE QUESTION OF GENUINENESS DID NOT ARISE. HENCE, WE DIRECT THE LD. CIT(E) TO GRANT THE REGIST RATION U/S 12A OF THE ACT TO THE ASSESSEE AND IT IS CLARIFIED IN CASE, THE ASSESSEE DOES NOT QUALIFY/SATISFY THE OBJECTS OF TH E TRUST AND/OR NOT INVOLVED IN GENUINE ACTIVITIES , THEN THE CONCERNED AUTHORITY SHALL BE AT LIBERTY TO WITHDRAW OR TO CANCEL THE REGISTRATIO N U/S 12A OF THE ACT. HENCE, IN THE AFORESAID OBSERVATIONS, THE APPEAL FI LED BY THE ASSESSEE IS ALLOWED. IN VIEW OF THE AFORESAID OBSERVATION AND CONCLUSION DRA WN BY THE CO-ORDINATE BENCH, WE ARE OF THE CONSIDERED OPI NION THAT ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 11 WHERE THE ASSESSEE SOCIETY IS A NASCENT STAGE THEN IT CANNOT B E EXPECTED THAT THE SOCIETY MUST DO SOME CHARITABLE WORK F OR GRANT OF REGISTRATION U/S 12AA OF THE ACT. 3.3 IN PARA NO.6 OF THE IMPUGNED ORDER, IT REFLECTS THAT ADDITIONAL QUERIES HAVE BEEN RAISED BY THE LD. CIT(E) VIDE SHOW CAUSE LETTER DATED 25.09.2017 WHICH ARE REPRODUCED HERE IN BELOW. (I) HOW DOES THE OBJECT OF CONSTRUCTING A HOSPITAL QUAL IFY FOR ANY OF THE LIMBS OF CHARITABLE PURPOSE U/S 2(15) OF THE ACT ? (II) HOW CAN THE HOSPITAL RUNNING BE TAKEN AS MEDICAL RE LIEF ? WHY CANT THE SAME BE CONSTRUED AS AN ENTERPRISE FO R COMMERCIAL GAINS? (III) PLEASE PROVIDE THE DETAIL IN SUPPORT OF THE CLAIM T HAT THE LAND PURCHASED IS FOR CONSTRUCTING A HOSPITAL. (IV) PLEASE PROVIDE THE EVIDENCE IN SUPPORT OF LOANS FRO M IMC TO THE TUNE OF 1.06 CRORE. (V) WHAT ARE THE RELATIONS BETWEEN THE MEMBERS OF THE GOVERNING BODY? IN REPLY TO THE SHOW CAUSE LETTER DATED 25.09.2017, T HE ASSESSEE SOCIETY HAD REPLIED VIDE REPLY DATED 27.09.2017 WHICH ARE ALSO REPRODUCED HEREIN BELOW. REPLY 1: THE OBJECT OF THE CONSTRUCTING HOSPITAL IS ONE OF THE OBJECTS AND QUALIFY U/S 2(15) OF INCOME LAX ACT 1961. THE CONSTRUCTION OF HOSPITAL WILL BE FOR CHARITABLE PURPOSES AND FOR NE EDY DEPRIVED PUBLIC AT LARGE. REPLY 2: THE HOSPITAL RUNNING WILL BE CHARITA BLE AND WILL BE A MEDICAL RELIEF FOR THE NEEDY AND THE PUBLIC WHICH CANNOT AFFORD THE COSTLY MEDICAL FACILITY IN PRESENT DAYS. THE HOSPITAL WILL BE CHARITABLE AND NOT FOR COMMERCIAL GAINS. REPLY 3: THE LAND HAS BEEN PURCHASED FOR THE HOSPIT AL. THE CIAIM WE CAN SHOW ONLY AFTER CONSTRUCTION. IT IS A WELFARE ACTIVITY IN THE ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 12 SOCIETY AND WHICH SHOWS OUR GENUINENESS THAT A BUSI NESS ENTITY OF ONE OF THE GOVERNING BODY MEMBERS HAS PROVIDED R S 1.06 CRORES AS LOAN FOR PURCHASE OF LAND. REPLY 4: THE CERTIFIED COPY OF LOAN OF RS 1.06 CRO RES FROM IMC IS ENCLOSED. FROM THE REPLY NO.1 IT REFLECTS THAT CONSTRUCTION OF HOSPITAL WILL BE FOR CHARITABLE PURPOSES AND FOR NEEDY A ND DEPRIVED PUBLIC AT LARGE. FURTHER FROM REPLY NO.2 IT REFLECTS THAT THE HOSPITAL RUNNING WILL BE CHARITABLE AND WILL BE A MEDICAL RELIEF FOR THE NEEDY AND THE PUBLIC WHICH CANNOT AFFORD THE CO STLY MEDICAL FACILITY IN PRESENT DAY . THE HOSPITAL WILL BE CHARITABLE AND NOT FOR COMMERCIAL GAINS. HOWEVER FROM THE AMENDED AIMS AND OBJECTS AND RULES AND REGULATIONS OF THE SOCIETY IT D OES NOT REFLECT THAT THE HOSPITAL WILL BE CHARITABLE AND NOT FOR COMMERCIAL GAINS. ON SPECIFIC QUERY RAISED BY THE BENCH, WHICH WAS ACCE DED BY THE LD. AR ON BEHALF OF THE ASSESSEE/APPLICANT SOCIET Y THAT THE ASSESSEE SOCIETY SHALL GET INCORPORATE THE COND ITION THAT THE HOSPITAL WILL BE CHARITABLE ONLY AND NOT F OR COMMERCIAL GAINS, IN THE AIMS AND OBJECT/ MOU OF SO CIETY . WE ENDORSE THE ASSENT OF THE LD. A.R. ON THE AFORESAID REASONING, WE ARE INCLINED TO SET ASID E THE ORDER PASSED BY THE LD. CIT(E) AND FEEL IT APPROP RIATE TO REMAND THE CASE IN HAND TO THE FILE OF THE LD. CIT(E) FOR DECIDING AFRESH WHILE TAKING INTO CONSIDERATION THE FACTS, CIRCUMST ANCES AND DOCUMENTS INTER-ALIA, THE AMENDED MOA WHEREBY THE AIMS AND OBJECTS HAVE ALREADY BEEN AMENDED AND FURTHER INCORPORATION OF CONDITION IN THE AIMS AND OBJECTS OF SO CIETY TO ITA NO.694/ASR/2017 (A.Y:2017-18) CARE & SHARE WELFARE SOCIETY, LUDHIANA VS. CIT(E) 13 THE EFFECT THAT THE HOSPITAL WILL BE CHARITABLE ONLY A ND NOT FOR COMMERCIAL GAINS. THE LD. CIT(E) SHALL ALSO BE AT LIBERTY TO RE-EXAMIN E THE CASE OF THE ASSESSEE SOCIETY INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE OBSERVATIONS MADE IN THIS ORDER EXCEPT DIRECTED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE SOCIETY I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.06.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:27.06.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S CARE AND SHARE WELFARE SOCIETY, LUDHIANA (2) THE CIT(EXEMPTIONS), CHANDIGARH (3 THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER