CV Raman Educational & Charitable Trust Vs CIT (Exemptions) (ITAT Chennai)
The assessee, Sir C.V. Raman Educational & Charitable Trust, applied for registration u/s 12AB and approval u/s 80G. The trust was formed in 2006 with objects relating to education, medical relief and assistance to the poor, and had acquired 17.3 acres of land intending to establish an educational/paramedical institution. However, due to zoning restrictions, financial constraints and change in trustees, the activities had not yet commenced.
The CIT(E) rejected the application mainly on the grounds that:
- No charitable activities had been commenced since inception,
- Certain details regarding land were not filled in Form 10AB, and
- Loans taken for acquiring land had neither been repaid nor carried interest, raising doubts about genuineness.
Before the ITAT, the assessee explained that the trust had already taken steps in furtherance of its objects, including acquiring land, obtaining conversion approvals and restructuring the trusteeship to pursue the project. It was also submitted that registration would help the trust mobilise donations and start charitable activities.
The Tribunal held that non-commencement of activities cannot be treated as a ground to deny registration if the objects of the trust are charitable and the proposed activities are genuine. Relying on the Supreme Court ruling in Ananda Social & Educational Trust (426 ITR 340) and other precedents, the ITAT observed that at the stage of registration, the authority only needs to examine objects and genuineness of proposed activities, not actual performance of activities.
The Tribunal also noted that:
