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2016 (4) TMI 37 - AT - Income TaxRegistration under section 12AA denied - non charitable activities - siphoned off or misappropriation of income of the Society - Held that:- It is clear that the assessee society unsuccessfully tried to justify that family members of the management committee members rendered any kind of services. The fact that the names of 4 ladies were appearing in the attendance registers of the teachers and no attendance was marked against their names since beginning of the year, was observed in the course of survey proceeding, however, the assessee tried to justify that those 4 ladies are not teaching staff and a separate attendance registers was being maintained. This explanation was not found convincing by the Assessing Officer, as no such attendance register was found or produced in the course of survey proceeding. Further, the name of 4 lady members was entered in the attendance register of the teachers and no attendance was marked against their name, clearly established that the subsequent explanation by the assessee society of having separate attendance register was not true. The Assessing Officer has observed that the remuneration paid to those family members was also more than arm’s length remuneration. The facts of the case clearly show that the assessee society was engaged in siphoning of money under the garb of carrying out charitable activity in the name of education. Thus we are of considered opinion that the members of the management committee has siphoned off or misappropriated the income of the Society and thus the activity of the Society, cannot be termed as genuine and the Society in the garb of charitable activity of education, is engaged in enriching its members through undue means. It is evident that the Commissioner of Income Tax has not found the object of the society and genuineness of its activities as satisfactory, and refused the registration as per section 12AA(1)(b)(ii) of the Act. - Decided against assessee
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