10 September 2008
The CIT and ITAT held that the appellant was not carrying on any charitable service in just letting out the marriage halls and earning rent, the Commissioner while rejecting the 12AA enquired only into these details and not what he ought to have done. The section actually requires to Commssioner to go into the application of the funds of the trust whether such application is charitable in nature or not how the trust is getting fund for the charitable service. It is only the application of the funds of the trust that has to considered and not the source of the funds of the trust.
The court found that the DIT had not considered the objects at all and there were no comments as to the charitable nature of the objects.