COMMISSIONER OF INCOME TAX EXEMPTION U.P STATE CONS.& INFRA. Vs. REHAM FOUNDATION KANDHARI LANE LAL BAGH LUCKNOW

JUDGEMENT

(1.) This Full Bench has been constituted in terms of the reference order dated 18.01.2019 passed by Division Bench in the case of Commissioner of Income Tax Exemption U.P. State Construction and Infrastructure vs. M/s. Reham Foundation Kandhari Lane, Behind Islamia College, Lal Bagh, Lucknow vide order dated 18.01.2019. The questions referred are as folllows:-

(2.) It was on an Appeal preferred by the Revenue under Section 260 (A) of Income Tax Act, 1961 (hereinafter referred to as ''the Act of 1961'). The Appeal was preferred to challenge the order of the Income Tax Appellate Tribunal, which directed registration of the Trust under Section 12AA (1)(b) of the Act of 1961 within a period of sixty days, failing which it would deemed to have been registered. The challenge to said direction was made by the Revenue in reference to the judgment of the Division Bench in Income Tax Appeal No. 112 of 2013: Commissioner of Income Tax, Meerut vs. M/S. A.R. Trust Meerut decided on 04.09.2017 wherein it was held that the Income Tax Appellate Tribunal itself cannot direct for registration of a Trust, without recording satisfaction, as contemplated under Section 12AA of the Act of 1961.

(3.) Learned counsel for the Revenue submits that power for registration of a Trust or an Institution under Section 12AA of the Act of 1961 has been given to the Commissioner. Those powers cannot be exercised by the Tribunal. If at all on the scrutiny of the case in Appeal, a case is made out for registration of a Trust, it needs to be remanded back to the Commissioner. The direction for registration of the Trust under Section 12AA of the Act of 1961 cannot be given by the Tribunal itself. It is for the reason that registration of the Trust under Section 12AA of the Act of 1961 is subject to the satisfaction of the Commissioner about the genuineness of activities of the Trust. In absence of recording of satisfaction of the Commissioner about the object and activities of a Trust, a direction for registration would be illegal. It is for that reason alone, the Division Bench of this Court in the case of M/s. A.R. Trust Meerut (supra) caused interference in the order of the Tribunal, where direction was given for registration of the Trust within a period of sixty days.