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2016 (7) TMI 1302 - AT - Income TaxEligibility to Registration u/s. 12AA - proof of charitable activities - Held that:- Hon'ble Karnataka High Court in the case of Sanjeevamma Hanumanthe Gowda Charitable Trust Vs. Director of Income Tax (Exemption) [2006 (3) TMI 91 - KARNATAKA High Court] has set out the guidelines that for the purposes of registration under section 12A the authorities have to be satisfied about the genuineness of the activities of the trust or institution and how the income derived from the trust property is applied to charitable purpose and not the nature of the activity by which the income is being derived by the trust. AO while passing the scrutiny assessment u/s. 143(3) for A.Y. 2012-13 has accepted the income of assessee at Nil as returned by assessee. Thus it can hardly be said that the income derived by the trust by way of fees from the students were applied by the assessee-trust for the purpose other than the aims and objects of the trust. Also not the case of the Commissioner that the fees charged from the students received have been used for the purposes other than running the Educational Institution managed by the Assessee Trust. It is also not the case of the Commissioner that the activities carried out by the assessee are not in consonance with its objects. The ld. CIT has also not mentioned the exact enquiry report sent by the departmental authorities to ascertain as to on what basis they did not recommend for registration to the assessee. Thus CIT was not justified in rejecting the application of assessee for grant of registration. - Decided in favour of assessee.
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