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2008 (11) TMI 427 - AT - Income TaxEligibility for exemption u/s 11 - Educational institutions/university - Charitable or religious trust - Addition of cash credits - Claim of exemption u/s 10(23C)(iiiad). Eligibility for exemption u/s 11 - Educational institutions/university - Charitable or religious trust - objects are too wide ranging from education to urban homes or rural development to establish dharamshala, asharam etc. - registration under section 80G was denied - HELD THAT:- The only ground for denial of benefit under section 11 are : (1) the objects are too wide, (2) registration under section 80G was denied. In our opinion, both these reasonings are not valid to deny benefit of exemption under section 11. The Commissioner is an authority to determine as to whether objects of the trust are for "charitable purposes" within the meaning of section 2(15) and to examine the genuineness of its activities. Once the Commissioner is satisfied about the objects of the trust and genuineness of its activities, he shall pass an order in writing registering a trust as per procedure prescribed in section 12AA of the Act - though it is inadvertently mentioned that the registration is effective from 15-11-2002 (the date of application for registration), yet it will take effect from 22-7-2002 being the date of creation of trust. On the date the assessment was framed the order of Commissioner Hisar registering the trust under section 12AA of the Act was available to the Assessing Officer but the same was ignored which is deplorable act on the part of Assessing Officer. The Assessing Officer, on the other hand, drawn support from the order refusing registration under section 80G of the Act. Registration under section 80G was refused as on that date registration under section 12AA was not granted. However, a pre-condition for eligibility of exemption under section 11 is registration under section 12AA of the Act and not registration under section 80G. This distinction was not noticed by Assessing Officer. Addition of cash credits - HELD THAT:- We find that the assessee has filed all the evidences which requires to prove the genuineness of the cash credit. Persons also proved their source for giving the amount to the AO. In such circumstances, the addition cannot be made by treating the same as unexplained cash credit u/s 68. We, therefore, confirmed the deletion - Hon’ble Supreme Court in the case of Aditanar Educational Institution [1997 (2) TMI 3 - SUPREME COURT] held : "An educational society or a trust or other similar body running an educational institution solely for educational purposes and not for purpose of profit could be regarded as ‘other educational institution’ coming within section 10(22)." Claim of exemption u/s 10(23C)(iiiad) - HELD THAT:- AO, denied that even if there is a single non-educational object and the entire money can be diverted to that object any time - HELD THAT:- We find that though there are several objects for the year under appeal the only object pursued was for the promotion of education and hence it can be said that the assessee trust running the educational institution is existing solely for the purpose of education and hence entitled to exempt u/s 10(23C)(iiiad). Therefore, any income received by any person on behalf of such trust shall be exempt u/s 10(23C)(iiiad). In the result, appeal filed by revenue is dismissed and the cross-objection raised by assessee is allowed.
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