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2016 (9) TMI 213 - AT - Income TaxRegistration of the assessee society u/s 12AA(3) & (4) cancelled - allegations of the ld. Pr. CIT that the funds were siphoned off for the purpose other than the activities to achieve the objects of the assessee Society - Held that:- No verification was made from the students to substantiate that laptops/computers claimed to be distributed amongst the students were not given to them and even the recovery from the students towards the cost of the said laptops/computers has not been doubted. In the present case, the trustee of the assessee Society namely Sh. Sanjay Bansal surrendered the undisclosed income detected during the course of search in his individual capacity which has been accepted by the department, in view of the above it cannot be said that funds of the assessee society were used for non-charitable purposes. In the instant case, there is no denial by the various concerns from which the assessee made the purchases for the building material or computers or laptops etc. Therefore, the allegations of the ld. Pr. CIT that the funds were siphoned off for the purpose other than the activities to achieve the objects of the assessee Society are not sustainable. In the present case nothing is brought on record to substantiate that the assessee was not running the educational institutions for imparting the education which is a charitable activity. In the present case, it is an admitted fact that the assessee had been granted registration u/s 12A of the Act, since the assessee Society is engaged in running of educational institution and it is not brought on record at any stage that the assessee was not engaged in educational activity through various educational institution established by it and if the ld. Pr. CIT or the AO was not satisfied for various expenses incurred by the assessee than proper action would have been taken u/s 11 or 13 of the Act. A search was conducted at the assessee’s premises, however, no evidence of receipt of donation or capitation fee was found during the search and the presumption u/s 292C of the Act were rebutted by denial of the assessee that the purchases of the material for construction of the building and computers/laptops for distribution amongst the students were made through some of associated concerns of the trustees at the reasonable rate which were even lower than the market rate. The Banks granted the term loans to the assessee trust for the construction of building and purchase of the computers/laptops after proper verification. The assessee also repaid the term loan by making the payments of the installment and no finding has been recorded by the ld. Pr. CIT that the activities of the assessee trust were not genuine or not being carried out in accordance with the objects of the assessee trust. Therefore, the ld. Pr. CIT was not justified in cancelling the registration already granted u/s 12A of the Act, by invoking the provisions of Section 12AA of the Act. - Decided in favour of assessee
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