The Calcutta High Court (HC) has held that registration of trust u/s 12AA of the Income Tax Act,1961 is valid when the object of the Trust is charitable in nature and allowed the Exemption u/s 80(G)(S)(vi) of the act.
The Commissioner of Income Tax (Exemption), Kolkata [CIT(E)] rejected the application filed by Vijay Kumar Bajoria Foundation, the assessee for registration under Section 12AA of the Act on the ground that the assessee was not carrying on any charitable activity.
The correctness of the said finding was tested by the Tribunal and it was found that the Trust had a corpus fund of Rs.20,56,600/- and a sum of Rs.19,00,000/- was lying in the fixed deposit with SBI and out of the accumulated interest, a sum of Rs.3 lakhs was given as a donation to the T.B. Sanitarium at U.P.
Further found that the [CIT(E)] has not found objects of the Trust to be not charitable. The settled legal position is that while granting registration to a charitable institution/Trust if it is at the commencement state the powers of the [CIT(E)] before whom the application is filed are limited to the aspect of examining whether or not the objects of the trust are charitable in nature.
The [CIT(E)] has not recorded any finding that the object of the Trust is not charitable in nature and apart from that there was no material brought on record by the[CIT(E)] that the donations were given with some ulterior motive.
Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya observed that the Tribunal had rightly pointed out that no material was produced by the assessee therein to show that it carried out any charitable activity.
While dismissing the tax case appeal, the Court upheld theorder of the Tribunal.
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