TMI Blog2014 (7) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. The allegation of the Revenue that the assessee is charging heavy fees or the fees is similar to being charged by commercial colleges, has neither been factually proved to be correct nor can be a basis legally in view of the Board’s Circular for denying the registration of trust u/s 12A - the object of the trust is education and the assessee is running two educational institutions - one, for engineering courses and another, for B.Ed courses - the object of the trust is education which is charitable and the assessee is genuinely pursuing the same - it has duly fulfilled the conditions necessary for registration u/s 12AA - the verification of the donation or verification of violation of Section 13(3) is not the relevant consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel that the learned Commissioner of Income Tax rejected the assessee s request for registration under Section 12AA on the ground that the assessee has not produced all the details relating to the source of corpus fund received by it and also the genuineness/creditworthiness of the donors. The society has also not produced the evidence in support of its claim that no benefit has been derived by any of the persons specified under Section 13(3). In addition to the above finding of the CIT, he also relied upon the report of the Joint Commissioner of Income Tax wherein the JCIT has mentioned that the activities of the society are commercial in nature and therefore, did not fall within the ambit of charitable activities as defined in Section 2(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the assessee every year so as to point out that there was deficit every year from the running of educational institutions. He also referred to the Circular of the CBDT dated 19th December, 2008 vide F.No.134/34/2008-TPL in which the CBDT has clarified that education will constitute charitable purpose even if it incidentally involves the carrying on of commercial activities. He, therefore, submitted that learned CIT may be directed to register the trust under Section 12AA. In support of this contention, he relied upon the decision of ITAT, Delhi Bench in the case of Gian Ganga Vocational Educational Society Vs. CIT - [2013] 143 ITD 297 (Delhi) and of ITAT, Chandigarh Bench in the case of PIMS Medical Education Charitable Society V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which no or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he object of the assessee is the running of educational institution. As per the definition of Section 2(15), education is one of the activities which is charitable in nature. When the Finance Act, 2008 introduced a proviso to Section 2(15), the CBDT issued a Circular vide F.No.134/34/2008-TPL dated 19th December, 2008 so as to clarify the true scope of above Circular. Paragraph 2.1 of the Circular reads as under:- 2.1 The newly inserted proviso to section 2(15) will not apply in respect of the first three limbs of section 2(15), i.e., relief of the poor, education or medical relief. Consequently, where the purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute charitable purpose even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rses and another, for B.Ed courses. Therefore, it is established that the object of the trust is education which is charitable and the assessee is genuinely pursuing the same. Therefore, it has duly fulfilled the conditions necessary for registration under Section 12AA. So far as the issue of verification of corpus funds or donations is concerned, this exercise is to be carried out by the Assessing Officer while making the assessment of every year. Similarly, whether there is a violation of Section 13(3) or not, this aspect is to be examined by the Assessing Officer every year. In any year if there is an unverifiable donation or if there is violation of Section 13(3), the consequence will follow in the assessment of that year but the verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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