The appeal by the assessee is directed against the order of the CIT-II, Chandigarh, dt. 29th July. 2012 against the order passed under s. 12M of the IT Act, 1961 ('the Act' for short).
2. The assessee has raised the following grounds of appeal :
1. That the learned CIT' has erred in law as well as on facts in rejecting registration under s. 12AA of the Act which is arbitrary and unjustified.
2. That the learned CIT has erred in observing that activities of the society do not qualify in the nature of charity within the meaning of s. 2(15) of the Act which is unfounded, without any basis and as such the order is arbitrary and unjustified.
3. That the registration has been refused only on the basis of suspicion, conjectures and surmises which is not permitted under the law and as such the order refusing registration is illegal, arbitrary and unjustified.
4. The present appeal is filed before the Tribunal after a delay of 34 days. The assessee has moved an application for condonation of delay in filing the appeal before the Tribunal along with an affidavit of the concerned advocate. The plea of the assessee was that the order of CIT was received on lOth Aug., 2012 and the appeal was due to be filed before the Tribunal on 9th Oct., 2012 whereas the same was filed on 12th Nov., 2012 i.e. after a delay of 34 days. The plea of the assessee in this regard was that all the relevant papers in furnishing the appeal were handed over to the counsel Shri Vijay Mehra who had misplaced the same and the appeal was not filed in time. The affidavit of the then counsel Shri Vijay Mehra has also been filed in which he admitted that his office had misplaced the file as the same was tagged with another file and it came to his knowledge only when the assessee asked for the same. In the totality of the abovesaid facts and circumstances, we find merit in the plea of the assessee and the delay in filing the present appeal by 34 days is hereby condoned and we proceed to decide the present appeal on merits.
5. The only issue raised in the present appeal is against denial of registration under s. 12M of the Act. The CIT-II, Chandigarh, noted that the aims and objects of the assessee society were construction and maint~ance of religious places devoted to Lord Shiva, to organize pilgrimages, community kitchens, religious functions like Ram Leela, celebration of festivals, etc. The CIT further noted that the organization is primarily engaged in organizing 'Bhandara' i.e. community kitchen/free provision of food to pilgrims on their way to Amarnath shrine. This activity alone consumed major part of receipts of the organization. Other major expenses incurred were towards traveling, printing, welfare expenses, etc. During the financial year 2009-10, the assessee had received Rs. 1.46 lac in donation and 'during the financial year 2010-11, the assessee had received Rs. 25.14 lacs in donation. The expenses on 'Bhandara' had increased from Rs. 70,000 to over Rs. 17 lacs approximately. The fixed assets owned by the assessee society included an ambulance at value of. Rs. 55,000 and generator set and LCD 1V. In respect of the 'Bhandara' carried on by the assessee, the CIT held that such activity could be considered to have been carried on by the society.
However, the activity being carried on by the assessee being events specific, as per the crr, did not qualify as a stable ongoing activity in the nature of charity within the meaning of s .. 2(15) of the Act. The CIT further noted that the Amarnath Yatra was an annual event wherein the State Government agencies as well as Indian Army were having an organizational role and the assessee was one of the voluntary entities which claims to contribute free food/provision to the participants of Yatra. The assessee was not carrying on this activity from any established premises. Further, the welfare expenses of Rs. 2.20 lacs incurred by the assessee society on performance of last rites of one Shri Gurdial Singh was held by the CIT to help family of one particular individual which indicated· that he was somehow related to one of the members of the society, which in turn attracts the provisions of s. 13(1)(c)(ii) r/w s. 13(3) of the Act. The crr denied the registration under s. 12AA of the Act holding as under:
"In conclusion, the activities of the society are not of a perennial nature serving any long-term public good for which registration under s. 12AA of the Act is required. The scope and extent of the activities carried out by the society are very limited and seasonal, therefore, they do not qualify the society to be eligible for exemption of income and registration under s. l2AA of the Act. Thus, at this stage, registration under s. 12AA of the Act cannot be granted and the application of the assessee for registration under s. l2AA of the Act is hereby rejected."
6. The assessee is in appeal against the order of CIT.
7. The learned Authorised Representative for the assessee took us through aims and objects of the assessee trust and pointed out that various objects were· being carried on by the assessee society which were all in the nature of charitable activities and merely because some of the activities were being carried out by the assessee from nonestablished place, does not merit the rejecti0J? of the registration under s. l2AA of the Act as that was not the requirement of the section. It was further pointed out by the learned Authorised Representative for the assessee that the registration under s. l2A of the Act has been denied to the assessee on mere surmises. The assessee is not related to the family or the person whose body was transported. The learned Authorised Representative for the assessee further placed reliance on the ratio laid doWn by the Hon'ble Supreme Court on CfT us. Dawoodi Boham Jamat (2014) 268 CTR (SC) 1 : (2014) 102 DTR (SC) 361 : 43 taxmann.com 243 (SC) for the proposition that even if the activities were religious in nature, the registration under s. l2A of the Act was to be allowed to the assessee.
53 8. The learned Departmental Representative for the Revenue placed reliance on the order of the CIT.
9. We have heard the rival contentions and perused the record. The assessee society was registered with the Registrar of Firms & Societies on 21st Jan., 2010 vide Registration No. 4074 of 2010. The assessee filed an application for registration under s. 12AA of the Act on 11th Jan., 2012 before the CIT-II, Chandigarh. The aims and objects of the assessee society were as under :
"(1) To create a sense of brotherhood, humanity, co-operation, mutual harmony, love and affection amongst the members of the Dal and also amongst the general public.
(2) To take over, erect. construction, alter, maintain, improve, develop, manage and control an Ashram, Dharmshala, temple/Mandir, pious and other religious institutions in the name of Lord Shiva.
(3) To permit worship to be carried out at the shrines of Lord Shiva under the control of the Dal and provide all kinds of worship materials and required facilities for the devoties.
(4) To engage and employ priests for performing prayers, on such salaries as the Dal may deem fit and even suspend or remove them if necessary and appoint others to perform the prayers.
(5) To organise various religious factions like Sankeertan, Jagran, Satsang, Ramleela, Krishanleela, Ramcharit Manas Path, Shivratri and other similar functions from time to time as and when governing body of the Dal may decide.
(6) To establish, maintain, manage and control the shelters for the use of devotees during festivals religious functions, Melas etc.
(7) To organise Tirath Yatras to various shrines of the Lord Shiva and other religious places. To arrange and organize Bhandara/Langar on differ,ence occasions as and when the/governing body of the Dal may decide .
. (8) To organize blood donation, eye and free medical camps for the poorer section of the society.
(9) To render all possible help in case of any natural calamity e.g. earth quake, flash floods, famine or in case of any other emergency.
(10) To render all possible help in case of any natural calamity e.g. earthquake, flash floods, famine or in case of any other emergency."
10. The claim of the assessee for grant of registration under s. 12A of the Act was that it was a charitable non-profit organization, working to create a sense of brotherhood, humanity and communal harmony and equality among general public. The assessee was organizing free of cost 'Bhandara' and also organizing blood donation camps, mass-marriages, etc. The assessee was establishing kitchen at the base camp and was providing 'Langars' to the persons enroute to Shri Amarnath Shrine. The Bhandara expenses were thus, booked as an expenditure being relatable to the activities carried on by the assessee. Further expenditure in relation to travelling for setting up base camp and other welfare expenses were being carried out by the assessee. The assessee claims to have also established a blood donation camp. In addition, the assessee claims that it had transported the body of one of the deceased on way to Shri Amarnath Shrine and had arranged transportation of his body from shrine to his home town and also had made certain contributions for the welfare of his family. The assessee .claims that it was carrying out all these welfare activities and was entitled to registration under s. 12AA of the Act .
. ~ 11. The issue arising in the present appeal is registration allowable to a trust under s. 12AA of the Act. In order to avail the benefit of deduction under ss. 11 and 12 of the Act, it is mandatory that the trust or organization should be registered by way of filing application under s. 12A of the Act, consequent to which the CIT on being satisfied that the activities of the trust are charitable and are genuine shall pass an order registering the trust under s. 12AA of the Act.
12. The scope of powers of the CIT for registration of trust under s. 12AA has been elaborated upon by the Punjab & Haryana High Court in CfT us. Surya Educational & Charitable Trust (2011) 203 Taxman 53 (P&H) wherein it has been held as under:
"As per s. 12AA an application for registration of the trust and institution is required to be made within one year from the date of creation of the trust or the establishment of such institution. The procedure for registration of the trust or institution is prescribed under s. 12AA. In terms of cl. (a) of s. 12AA, the CIT is to satisfy himself about the genuineness of the activities of the trust on such inquiries as he may deem necessary. Sub-ss. (IA) and (2) of s. 12AA are procedural in nature, whereas sub-so (3) of s. 12AA empowers the CIT to cancel the registration of the trust or institution, if he is satisfied that the activities of such trust or institution are not genuine or are not carried out in accordance with the objects of the trust or institution. (Para 8)
Sec. 11 contemplates that the income as specified therein shall not be included in the total income of the previous year of the person in receipt of the income derived from the property held under the trust wholly for charitable or religious purposes, whereas s. 12 deals with the contributions received by the trust or an institution, established for conditions of ss. 11 to 13 of the Act is to be gone into by AO. while determining the income of trust at the time of assessment and not to be gone into by CIT, while grant~g registration under s. 12AA of the Act. The CIT had accepted the activity of providing free of cost Bhandara as one of the charitable activities but had denied the registration under s. 12AA of the Act to the assessee as the said activity was (sic-not) being carried out from any established premises. We find no merit in the said observation of the CIT as it is not the requir~ment of. the section that the charitable activities, if may, have to be carried out from any established premises. The welfare activities performed by the assessee also are in line with the activities prescribed under the Act and the assessee is entitled to the claim of registration under s. 12AA of the Act. Further. the expenditure incurred on the last rites of one of the deceased on way to the shrine and monetary help to the family cannot be said to attract the provisions of s. 13(I)(c)(ii) r/w s. 13(3) of the Act
'" as the said person was not related to the assessee. In the absence of the same, we find no merit in the order of the CIT in rejecting the registration under s. 12AA of the Act. We direct the CIT to grant registration under s. 12AA of the Act. The grounds of appeal raised by the assessee are thus, allowed.
14. In the result, the appeal of the assessee is allowed .