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2014 (4) TMI 1217 - AT - Income TaxApplication for registration u/s 12AA rejected - nature of activities of the assessee as of commercial nature - scope of enquiry at registration stage - Held that:- The activities of the assessee-institution, which is meant to promote and protect the interests of the Grain and Seed Merchants, who are its members, cannot be said to be activities of a commercial nature, and they fall within the ambit of activities of ‘general public utility’. For the financial affairs of the assessee, it is evident from the material on record that the donation to the Chief Minister’s Fund having been made by the assessee through a bank account of the assessee, from out of the receipt of donations from various members and others, numbering as many as 128, and as such, it cannot be said that there was any misuse of funds by the assessee. In respect of small amounts of donations received from many as many as 128 persons also, assessee claims to have maintained some record, which was produced before the Director of Income-tax(Exemption). No merit in the observations of the Director of Income-tax(Exemption) with regard to misuse of funds Allahabad High Court in the case of CIT V/s. Red Rose School (2007 (2) TMI 575 - ALLAHABAD HIGH COURT) the scope of enquiry contemplated while granting registration under S.12AA cannot extend to misuse of fund or earning profit by the assessee, as that part would be taken care of by Sections 11 and 12, while granting exemption under those sections. - Decided in favour of assessee.
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