Law:

Section:

Section 12A, read with sections 2(15), 11 and 12, of the Income-tax Act, 1961 - Charitable or religious trust - Registration of - Whether so long as a trust has education as one of its objects which is one of enumerated heads which qualifies and comes within scope of charitable purpose as enumerated in section 2(15), it has to be accepted that trust is having a charitable purpose as its object and may qualify for claiming exemption in terms of sections 11 and 12 subject to fulfilling conditions enumerated therein and, if so, grant of registration, so long as procedural requirements are complied with, is inevitable - Held, yes - Whether manner of application of funds and as to whether assessee can claim benefit of exemption in terms of sections 11 and 12 are questions which have to be examined by Assessing Officer at stage when it is urged and not by Commissioner while considering application for grant of registration under section 12A - Held, yes FACTS The assessee-trust was formed on 27-2-1992. One of the objects of the trust was imparting education and in the light of the running educational institutions and imparting education, it was availing of the facility of exemption in terms of section 10(22) up to the assessment year 1998-99. However, thereafter, in view of the amendment brought about by the Finance Act, 1999 deleting the provisions of clause (22) of section 10, the assessee-trust could not claim exemption under that specific provision. Therefore, for claiming the exemption benefit in terms of sections 11 and 12, it filed an application under section 12A on 26-4-2002 claiming the registration from the date of the inception of that trust, viz., from 27-2-1992. The Commissioner rejected the application of the assessee on the grounds that : (i) amongst its object, the trust also had activities which were commercial in nature such as starting of industries in rural areas; (ii) the trust also had the object of carrying on the business in import and export; (iii) the trust deed permitted the trustees to draw remuneration for services rendered; and (iv) the trust was charging fee as tuition fee from the students who were admitted to the educational…

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