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2011 (8) TMI 500 - AT - Income TaxRegistration under section 12AA - The institutions of the assessee society are running educational institutions - Educational activity is considered as one among the charitable activities - The assessee is also running an orphanage. Running an orphanage is nothing but a noble charitable activity - The Commissioner of Income-tax has objected to accepting of donations/capitation fees at the time of admission into different courses - Of course, capitation fee as such is an unlawful thing and a curse on our society - But the Income-tax Act is not looking behind such events to find out the moral righteousness of such acts - Objection can be taken only if the donations are made involuntarily - Commissioner of Income-tax has no case that the students had donated out of compulsion or force - Therefore it is to be presumed that the students who sought admission in the institutions run by the assessee had given the donations voluntarily - So, for the limited purpose of Income-tax Act, the donations collected by the assessee society are to be treated as voluntarily contributions - Voluntary contributions are in the nature of income of a charitable society - There is nothing on record to show that the assessee has applied its funds for non charitable or religious purposes - Find that apart from the personal observations made by the Commissioner of Income-tax, there are no legally sustainable reasons to deny registration to the society under section 12AA of the Income-tax Act, 1961 - Decided in favour of assessee.
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