TMI Blog2014 (4) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... alth check-up camps – the Commissioner should have satisfied himself about the genuineness of the objectives and activities of the assessee-society, which were meant for the benefit of general public - as such, rejection of the application u/s. 12AA of the IT Act is clearly unjustified - the assessee satisfied all the necessary conditions for grant of registration u/s. 12AA of the IT Act and is entitled for registration – thus, the order is set aside and the CIT-II is directed to grant registration of the assessee u/s. 12AA of the Act – Decided in favour of Assessee. - ITA No. 431/Agra/2011 - - - Dated:- 7-9-2012 - SHRI BHAVNESH SAINI AND SHRI A.L. GEHLOT, JJ. For the Appellant : Shri Navin Gargh, Advocate For the Respondent : Shri K.K. Mishra, Jr. D.R. ORDER Bhavnesh Saini, Judicial Member This appeal by the assessee is directed against the order of the ld. Commissioner of Income-tax-II, Agra dated 21.09.2011 rejecting the application for registration u/s. 12AA of the IT Act on the following grounds : '1.1. Because in any view, the Ld. CIT-II, Agra has erred in rejecting the grant of registration u/s. 12AA of the Income-tax Act, vide o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of incidental activities of running of hostel, which was considered to be in the nature of business. Thus, the activities of the assessee were not found to be charitable in nature as per section 2(15) of the IT Act. The ld. Commissioner was unable to satisfy himself about the genuineness of the objectives and activities of the assessee-society for the benefit of general public which were necessary for grant of registration u/s. 12AA of the Act. Accordingly, application for registration was rejected. 4. The ld. counsel for the assessee reiterated the submissions made before the ld. Commissioner and submitted that the assessee is assessed to tax with the Revenue department. It is registered with the Registrar of Societies of Uttar Pradesh. PB-3 is registration certificate. The objects of the assessee are charitable in nature and of imparting education etc. Copy of Smrati Patra is filed at page 4 of the paper book and English translation at PB-44A. The assessee society is running the Institution, Raghvendra Hospital and Nursing Training Institute, Jhansi and is registered with the Indian Nursing Council, New Delhi (PB-5). The educational institution of the assessee-society i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering application for registration, shall also see that income derived by trust or institution is either not being spent for charitable purpose or such institution is earning profit - Held - Yes. (ii) Order of ITAT, Delhi Bench in the case of Shavak Shiksha Samiti v. CIT [2007] 16 SOT 23 (URO), in which it was held Section 12AA, read with section 2(15), of the Income-tax Act, 1961, Charitable or religious turst - Registration of - Whether education per se is a chartable purpose - Held - Yes. (iii) Decision of Hon'ble Allahabad High Court in the case of Fifth Generation Education Society v. CIT [1990] 185 ITR 634, in which it was held At the time of considering application for grant of registration under s. 12A, the CIT is not required to examine the application of income or carrying on of any activity by assessee trust or institution. (iv) Decision ITAT, Amrisar Bench in the case of Dream Land Educational Trust v. CIT 109 TTJ (Asr) 850 in which it was held CIT, having found no fault with objects of the trust and genuineness of its activities, was not justified in refusing registration under s. 12A on extraneous conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. Section 2(15) of the IT Act provides as under : '(15) charitable purpose includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year;' 6.1 Considering the above provisions, it is clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 139 confirmed the order of the Tribunal in which the Tribunal was of the view that if an assessee was an institution whose objectives are charitable as defined u/s. 2(15), the trust/institution would be entitled to registration u/s. 12A. Although the assessee earned income from its activities of profit, infrastructure facilities and also from other ancillary activities such as rental income from letting out of the property, sale of goods, etc. which may not be exempted, the Tribunal held that whether part of the income was exempt or not was irrelevant for registration of the institution for which the Commissioner has to satisfy himself about the object of the institution and genuineness of the activities of the institution and not about the nature of the income. 6.5 Considering the facts of the case in the light of the above decisions and the decisions cited by the ld. counsel for the assessee, it is clear that the ld. Commissioner on irrelevant and extraneous consideration, wrongly rejected the application of assessee for grant of registration. The assessee society is registered with Registrar of Society and its objects read as under : 1. To Organize Semin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hostel facilities. Therefore, it could not be considered as the assessee is running hostel for the purpose of business. The provision for providing hostel facility to the medical students is incidental to the aims and objects of the assessee. The AO in his report submitted that the assessee society is running General Nursing and Midwifery Training Institute imparting nursing training up to the level of post graduation. Therefore, providing educational facilities is part of the charitable purposes as per section 2(15) of the IT Act. Therefore, the objects of the assessee were charitable in nature and were conducting genuine activities. Other considerations, noted by the ld. Commissioner are irrelevant for the purpose of enquiry for grant of registration. Considering the totality of facts and circumstances, noted above, we are of the view that the assessee is running Nursing Training Institute to impart education in the Bundelkhand Region and also held free health check-up camps. Therefore, the ld. Commissioner should have satisfied himself about the genuineness of the objectives and activities of the assessee-society, which were meant for the benefit of general public and as such, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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