Case Law Details
Agrasen Jan Kalyan Trust Vs CIT (ITAT Raipur)
The Agrasen Jan Kalyan Trust filed an appeal against the order passed by the Commissioner of Income Tax (Exemption) rejecting their application for registration under Section 12AA of the Income Tax Act, 1961. The trust argued that their activities were charitable in nature and should not be the sole basis for registration.
The Commissioner of Income Tax (Exemption) rejected the trust’s application, stating that their activities exceeded the allowed limit of 20% for general public utility, which could be considered as an activity in the nature of trade, commerce, or business. However, the trust contended that the focus should be on their charitable objects, not the activities they undertake.
Citing the judgment in Ananda Social & Educational Trust v. CIT, the trust argued that registration under Section 12AA should be based on the genuineness of charitable objects and proposed activities, not the actual activities carried out. The trust emphasized that their activities had a “no profit motive,” and the major income was from interest on FDRs.
The trust also highlighted that the department had subsequently granted registration under Section 12AA to them on similar facts, which showed inconsistency in the department’s approach.
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