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2017 (1) TMI 1092 - AT - Income TaxNon granting registration u/s 12AA - Held that:- What the learned Commissioner of Income Tax has found objectionable is that the applicant society, being liable to claim exemption under section 10(23C)(iiiab), since it is wholly financed by the State Government has not done so. Clearly, this is not a reflection on the genuineness of the activities being carried on by the applicant society. In fact, it is affirmation of the same since even as per the aforestated observation of the learned Commissioner of Income Tax, the applicant society is eligible to claim exemption under section 10(23C)(iiiab) of the Act which grants exemption to institutions existing solely for the purpose of imparting education. Other adverse finding of the learned Commissioner of Income Tax is vis-ŕ-vis the fact that the applicant society has wrongly claimed exemption under section 10(23C)(iiiad) of the Act since aggregating the income of the society, college and school run by it, the same exceeds ₹ 1 crore which is the limit set under the Statute for claiming exemption under section 10(23C)(iiiab) of the Act. Again we find that this has no reflection on the genuineness of the activities carried out by the applicant society, but is an affirmation of the genuineness of the activities since it calls into question the claim of exemption under section 10(23C)(iiiad) of the Act, which grants exemption from tax of incomes of institutions existing solely for the purpose of education and whose receipts during a financial year do not exceed a specified limit, on account of the income exceeding a particular limit but does not doubt the genuineness of the activities carried out by the assessee. Further the observation of the Ld.CIT that the institutions of the applicant society are being run on commercial lines ,we find has no basis. Ld.CIT has merely made a general comment on the above lines which is not supported by any facts or figures and hence in our view requires no consideration. Since the genuineness of both the object and activities of the assessee society having not been doubted, we are of the considered opinion that the order of the Ld.CIT cannot be sustained. Consequently we set aside the order passed by the CIT and direct that registration applied for by the applicant society u/s 12A of the Act be granted. - Decided in favour of assessee
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