The ITAT, Ahmedabad bench, in Shri Swaminarayan Mandir v. DIT (Exemption), held that the Commissioner, on receipt of application for registration under section 12AA of the Income Tax Act, is required to conduct an inquiry for satisfying himself about the genuineness of the Trust.
Assessee-Trust made an application to obtain registration under section 12AA of the Income Tax Act. The DIT(Exemption), on receipt of registration asked the assessee to produce the Trust Deed. However, assessee failed to produce the same. The Officer, rejected the application suspecting the genuineness of the trust.
On appeal, the assessee contended that it had formulated a Trust-Deed, which was submitted before the Charity Commissioner. It was submitted that since the application is still pending before the Commissioner, it had sought for some time to produce it before the DIT(Exemption), however, the same was not granted.
The division bench of the Tribunal, while allowing the appeal, held that as per the provisions of section 12AA, the Principal Commissioner or Commissioner is required to conduct an inquiry for satisfying himself about the genuineness of the trust. “In the present case, the assessee was not having any trust deed. So it is quite difficult for the ld. Commissioner to arrive at a firm conclusion about the objects of the trust. In case the trust deed is being written after application for grant of registration, then that deed can never be seen through by the ld. Commissioner for satisfying himself. In any case, we have to set aside the proceedings to the file of the ld. Commissioner for satisfying himself about the objects of the trust. Before us also, copy of the trust-deed with the Charity Commissioner has not been placed on record. The assessee is yet to receive a registration certificate from the Charity Commissioner. In this background, we deem it appropriate to dismiss this application at this stage being premature with a liberty to the assessee to file fresh application before the ld. Commissioner for grant of registration as and when it fulfills necessary requirements.”
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