TMI Blog2017 (7) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming order passed by CIT is part of ground no. 5 which is one of the four grounds on which registration was cancelled by CIT-II, hence neither the judgments relied by appellant, in our view, are applicable in the case in hand nor the same help appellant in any manner. So far as argument regarding observations made by Tribunal when application for registration was considered, we find has rightly been distinguished by Tribunal. When an order is to be passed on the basis of activities of Assessee having already taken and borne out from record, same have to be examined not on mere averments contained in Memorandum of Society but in the light of actual activities carried out by Society which was not the position when issue of grant of registration was to be considered. - Decided against Assessee. - Income Tax Appeal No. 74 of 2015 - - - Dated:- 7-7-2017 - Hon'ble Sudhir Agarwal And Hon'ble Dr. Kaushal Jayendra Thaker, JJ. For the Appellant : Ashish Raj Shukla For the Respondent : Alok Mathur ORDER ( Delivered by Hon'ble Sudhir Agarwal, J. under Chapter VII Rule 2 of Allahabad High Court Rules, 1952 ) 1. This is Assessee's appeal unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... College and Hospital at Safedabad, Barabanki. It was duly recognized by Dental Council of India, New Delhi (hereinafter referred to as the DCI ) which prescribes courses run by Dental Colleges and monitored by DCI. Dental College is affiliated with Avadh University, Faizabad for the purpose of conducting examination. It had 40 seats for first academic session in the year 2003-04. Fee to be charged by Medical and Dental Colleges is fixed by a Committee constituted by State Government in view of Supreme Court's judgment in Islamic Academy of Education and another vs State of Karnataka and others, 2003(6) SCC 697. Pursuant thereto fee of students undergoing dental course in College, run by appellant, was fixed tentatively by said Committee, as communicated by State Government vide letter dated 07.09.2005, at ₹ 1,50,000/- lacs per Session for 2004-05 and 2005-06. Subsequently it was finally determined at ₹ 1,72,000/- for Session 2004-05, 2005-06 and 2006-07 vide Government's letter dated 17.07.2006. 6. As per counsel's advise, Assessee filed application in the office of CIT-II, under Section 12A of Act, 1961, for registration. It was received in the office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s funds are not being utilized solely for charitable purposes. It is seen that an imprest account in the name of Shri C. P. Chaudhary, President is being maintained in the books of society and various incoming outgoing entries were found therein. However, the purpose of utilization thereof for charitable purposes could not be established as the Assessee could not satisfactorily explain the same before AO at the time of assessment proceedings. ii) The funds of the society are stated to be used for payments for purchase of land but the society doesn't have documentary evidences showing registry of land. The society also does not have proof to substantiate the utilization of alleged advance to various parties which shows that the amount of ₹ 53,10,070/- has been used for other than charitable purposes. iii) During the course of survey operations on 24.02.2009, a sum of ₹ 1.10 crores was surrendered by Society and the amount was bifurcated in F.Y.s 207-08 2008-09 (relevant to A.Y.s 2008-09 2009-10) and surrendered amount includes the amounts invested in construction of building and also under Miscellaneous heads. This implies that the society is also get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been camouflaged. This order of CIT-II dated 19.10.2007 was set aside by Tribunal vide judgment and order dated 31.08.2008 in ITA No. 670/Luc/2007 relying on a judgment of this Court in Commissioner of Income Tax vs. Red Rose School (2007) 163 Taxman 19 observing that Government Agencies have full control and check over the college. Society set up the College for educational purposes without any profit motive. The fee being charged by College is just sufficient for maintaining and running College. It is in terms of fee prescribed by CPMT for its affiliated Colleges. In addition, College has set up a dental 100 chair OPD clinic with full qualified doctors and surgeons providing free treatment to villagers at nominal registration fee of ₹ 5 only. College daily attends to about 75-100 patients and provide dental treatment. The said order of Tribunal attained finality. Thereupon CIT granted registration and that being so it was not open for Tribunal while passing impugned judgment and order to take a different view. In fact Tribunal this time has upheld the view taken by Tribunal earlier which has been set at naught by Tribunal's earlier judgment and this was not permissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and run a dental college without any charge and such a Society realize huge fee from students, it would be a case where Society is not running according to its objects and, therefore, Section 12-AA(3) of Act, 1961 has rightly been applied by CIT-II in cancelling registration order. He stated that Tribunal has not reviewed its earlier order or made out a new case inasmuch as Tribunal earlier considered the law that at the time of registration which was to be seen at that time, i.e., whether objects laid down in bye-laws are charitable or not but for the purpose of attracting Section 12-AA(3) it is to be examined whether objectives of trust are actually carried out or not which is based on the actual activities undertaken by Assessee. 13. We have head learned counsel for parties at length and perused the record. 14. We have gone through the entire order of Tribunal and do not find that it has reversed findings of CIT-II recorded in the order dated 03.09.2012 on any of the grounds on which notice was issued to Assessee proposing cancellation of registration under Section 12-AA(3). It has clearly recorded a finding that CIT-II was satisfied that activities of trust or institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 0.303 hectares and the area of the second is 0.513 hectares. What is important is that the official rate of the 1st land is ₹ 6,00,000/- per Bigha, while that of the 2nd land is ₹ 5,00,000/- per bigha. This establishes the fact that the correct purchase price of the first price of land has been deliberately suppressed by the buyer and the seller has been paid in some undeclared manner. To sum up, as per the evidence available the amount of ₹ 5,50,000/- withdrawn by Dr. C.P. Chaudhary from the Society on 28.08.2008 could not have been utilized for purchasing the land standing in the name of Sri Ram Naresh Koli and has been utilized by him for some unspecified personal purpose. This goes to show that all the activities of the society are neither genuine nor are being carried out in accordance with the objects of the society, thereby contravening the provisions of Section 12AA(3) of the I.T. Act. 16. The second ground was use of ₹ 53,10,070/- which Society sought to explain as advancement of money for purchase of land. Regarding this ground explanation of Assessee has been accepted and, therefore, order of cancellation is not founded on this ground. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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