M/S. HARF CHARITABLE TRUST (REGD.), MALERKOTLA Vs. THE CHIEF COMMISSIONER OF INCOME TAX, LUDHIANA AND ANOTHER

JUDGEMENT

(1.) Challenge in the present writ petition is to the order dated 17.09.2012 (Annexure P -5) passed by the Chief Commissioner of Income Tax -respondent no. 1 wherein, the application of the petitioner for grant of approval for exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 (in short 'the Act') has been rejected.

(2.) The predominant reason which weighed with respondent no. 1 - The Chief Commissioner of Income Tax, Ludhiana was that the petitioner - Trust had an intention to carry out business activity which was not permissible for charitable organizations. The trustees were in place for the whole duration of their life and it gave the organization a look and character of a private body rather than a charitable organization and the objectives were not related to the promotion of education and the educational trust did not exist solely for educational purposes.

(3.) The petitioner's case is that the Trust is registered under the Societies Registration Act, 1860 and is a public charitable trust and running a school in the name of Sohrab Public School, Nabha Raod, Malerkotla solely for educational purposes and is being regularly assessed to income tax. An application was submitted in Form 56D under Section 10(23C)(vi) of the Act read with Rule 2CA seeking exemption from payment of income tax as per requirements and it also filed the audited balance sheets for the last 3 years plus the trust deed. Certain information was asked for and a detailed reply was filed clarifying each and every issue and an opportunity of hearing was afforded by respondent no. 1, who rejected the claim on untenable grounds.