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III. Direct Taxes Case Law:
1. ACE
Vision Educational & Charitable Trust Vs. CIT(Exemption), I.T.A.
No. 827/CHD/2016, Date of Pronouncement: 08.06.2018, ITAT - Chandigarh
Issue: Whether
rejecting the registration application u/s 12AA merely on account of
extraordinary powers with the managing trustee to appoint or remove
other trustees and also to nominate their successor is appropriate?
Held: No
Facts: The
assessee trust filed an application for registration u/s 12AA of the
Act. It was submitted that the object of the assessee trust was to
provide education, medical and other facilities to the public at large
on a non-profit basis. The assessee had started a school. The Ld. CIT(E)
examined the trust deed and found that the composition of the trust was
restricted to the husband and wife who were permanent trustees. They
had an unhindered power in respect of appointing and removal of other
trustees. Even the applicant had not cited a solitary example in respect
of subsidized education being imparted to the needy or even adhered to
norms under Right to Education Act. And, finally concluded that the
arrangement of the composition of the society had been kept in such a
manner that two trustees were empowered to control the entire working
and it was difficult to preclude the possibility of large scale
activities that did not ensure to the benefit of general public and
therefore, rejected the application. Being aggrieved, the assessee is in
appeal before the Hon’ble Tribunal.
Held:
The Hon’ble Tribunal discussed the Circular No. 14/2016 issued by CBDT
which clarified that there is no provision under the Act which called
for denial of exemption u/s 10(23C) merely on account of extraordinary
powers with the managing trustee to appoint or remove other trustees. It
is an admitted fact that the assessee trust is running school which
falls within the purview of scope of education which has been declared
as charitable purpose as per provisions of section 2(15) of the Act.
Therefore, CIT(E) is directed to grant registration to the society.
The appeal is allowed in favour of the assessee and against the revenue.
Cases referred:
• PIMS Medical & Educational Charitable Society vs. CIT, [2013] 31 Taxman 371 (ITAT- Chandigarh)
• Baba Amarnath Educational Society vs. CIT [2012] 18 Taxman 222 (ITAT- Chandigarh)
• M. R. Educational Trust vs. CIT, ITA No. 861/Chd/ 2014, date of pronouncement: 23.05.2016
(Please click here for judgment)
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