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2017 (10) TMI 1514 - ITAT CHANDIGARHExemption u/s 11 - denial of registration u/s 12AA - land and complex of which the assessee society is carrying out development and maintenance belongs to the government - HELD TAT:- No motive of profiteering is involved in such types of activities as the assets created are not owned by the society but are passed on to the public at large for common use and benefit. Since as per the provisions of section 11 to claim exemption from taxation, the income should be derived from property held under the trust wholly for charitable or religious purposes and to the extent to which such income is applied to such purposes in India'. Admittedly in this case, the society has constructed the building of Mandir complex and community hall etc. The property, though is not owned by the trust, yet, it has been held under the trust, wholly for charitable and religious purpose, the income from which, as per the objects of the society, is to be applied for such purposes only. There is a copy of the advertisement on behalf of the said Association inviting the members of the public at large and the handicapped persons in particular, to join the conference at the complex, Mandir Shree Mahakali, Sangrur and further a note at the bottom of the advertisement has been given that free tea and food will be served . There are also placed copies of letters from the individuals as well from organizations for booking of rooms and providing of utensils and beddings etc. These evidences on the file prove beyond doubt that the use of community hall and the Mandir complex is not limited to any particular section or limb of the society, rather, the same is open to all and offered for utilization not only to the individuals but also to social, charitable and religious organizations as observed above. Further, a perusal of the objects of the society reveal that none of the objects gives any presumption that any activity of the assessee society is restricted to a particular caste, community or religion. So far as the observation of the CIT(E) that the Society’s main focus is on religious ethics is concerned, there is no bar u/s 11 or 12A of the Act for giving registration to a religious trust. Rather for claiming exemption u/s 11, the application of the income is required to be for charitable or religious purposes. It is proved that not only the objects of the assessee Society are charitable in nature but the society is also carrying the activities of religious and charitable in nature. Assessee has brought our attention to resolution dated 17.12.2015 wherein it has been resolved in the General Body meeting that in case the society is dissolved, any asset whether movable or immobile will be transferred to some other religious trust whose objects will be similar to that of the assessee trust and that the name of such trust will be decided in the general body meeting with the consent of 3/4th of its members. So far as the discrepancy in accounts pointed out by the Ld. CIT (E) is cornered, the Ld. AR of the assessee has explained that the liability shown as on 31.3.2013 has been discharged in subsequent years. In our view the examination of the account in detail / application of income is to be seen at the time of giving exemption u/s 11 of the Act and not at the time of granting of registration u/s 12A of the Act. While granting registration u/s 12A of the Act, it is to be seen whether the objects of the assessee society are charitable or religious in nature and the activities carried out by the assessee are in furtherance of such objects. In view of the above discussion, we direct the Ld. CIT (E) to grant registration u/s 12AA of the Act to the assessee society. - Decided in favour of assessee
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