Case Law Details
Brief of the Case
ITAT Delhi held In the case of Jaipal Singh Sharma Trust vs. CIT that it is well settled that at the stage of grant of registration, the non-commencement of the activities by the Trust cannot be a ground for refusal of registration u/s 12AA.
On the observations made by the CIT, on the alleged inadequacy of the evidences brought on record to show the capacity of the lenders from whom the assessee trust had borrowed loans, it is clear that such comments cannot be a ground for refusal of grant of registration u/s 12AA of the Act. The aspect regarding examination of the source and application of the funds are in the domain of the Assessing Officer and not in that of the CIT, while processing the application u/s 12AA.
Facts of the Case
The assessee is a Trust and was established on 22.10.2013. The main objects of the Trust are “to provide health education including technical education, water conservation and environmental awareness and to establish medical colleges and hospitals etc.” It filed an application in form no.10A under Rule 17A of the I.T. Rules, 1962 on 13.3.2014, for grant of registration u/s 12AA. The CIT rejected the said application on the ground that the assessee trust has not taken any steps in pursuance of its aims and objects, except acquisition of land and hence the genuineness of the activities of the Trust cannot be verified. He also stated that the evidence brought on record to show the capacity of the lenders who have advanced loans to the assessee trust, are not sufficient. Hence he rejected the application for grant of registration u/s 12AA by concluding that the registration cannot be granted to the Trust at this stage.
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