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2018 (4) TMI 1512 - AT - Income TaxGrant of registration u/s 12AA rejected - assessee society is controlled by one family for profit purpose and ordinary public is restricted from membership - Proof of charitable activities - Held that:- Charitable nature of any society cannot be determined on this sole fact only rather all the aims and objects are required to be examined in entirety. Rather in case charitable society is run by a single unit may be member of one family, they can carry out the charitable activities more effectively to avoid any type of unnecessary hindrances. As in case of Maa Saraswati Education Society vs. CIT [2016 (12) TMI 1076 - ITAT DELHI] while dealing with the identical issue held that a society controlled by close family members cannot be debarred from registration as society is a separate entity from its members having been governed by the Societies Registration Act, 1960. So, when we read the trust deed particularly aims and objects of the assessee society in entirety, it leads to the conclusion that the assessee society has been set up for carrying out the charitable activities under the Act. In case hefty fees is being charged by the assessee society and at the same time, it is providing free education to the needy students and free medical aid to the needy patients, it cannot change its nature from charitable society to profit making society. When the surplus funds are further being utilized to carry out the aims and objects of the society, a society cannot be denied registration u/s 12AA of the Act. Section 12AA provides for procedure for registration as to how the ld. CIT will provide the registration after getting satisfied about the aims and objects of the society and not to sit on the matter like the AO as all these facts are to be taken care of by the AO at the time of assessment. So, merely earning profit out of which only 15 – 16% are lying surplus with the assessee society cannot be a ground for refusal of registration in this case. CIT has not disputed the fact that aims and objects of the assessee society are charitable he cannot dispute the genuineness of the activities of the Trust on the basis of surmises only. - Decided in favour of assessee.
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