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2019 (4) TMI 622 - ITAT DELHIExemption u/s 11 - charitable activity OR not? - activity of providing education through the medical college - assessee was engaged in the nefarious activities for inducing of fresh batch of students for academic session without the requisite infrastructure - HELD THAT:- CIT (Central)-3, New Delhi has noted that the assessee was engaged in the nefarious activities for inducing of fresh batch of students for academic session without the requisite infrastructure and therefore, it is a clear violation of clause (ii) of para 4 of the trust deed, simultaneously, violating the provisions of section 2(15) while carrying out of its activity. Assessee-society was established with the sole intention of helping charitable and philanthropic venture of running medical college and thereby seeking to claim exemption on the income so generated under section 11 and 12 of the I.T. Act. It is further noted that due to nexus of corruption by way of bribe and criminal misconduct by the assessee trust, registration of the Trust was cancelled since inception u/s. 12AA(3) of the Income Tax Act, 1961. Therefore, in our opinion, Ld. Pr. CIT has rightly observed that a charitable trust conduct must be at par with its provision of trust deed and as per existing law. Its misconduct and desire to defy rules and norms have been exposed by virtue of the bribe activities. Such incidents cannot be classified as charitable by any reckoning. Such organisations which do not carry any charitable activity, cannot be granted registration. In these facts and circumstances, Ld. Pr. CIT was correctly satisfied that the activities of the trust are not genuine and not being carried out in accordance with the objects of the trust. Due to nexus of corruption by way of bribe and criminal misconduct by the assessee trust, registration of the Trust was cancelled since inception u/s. 12AA(3). We also note that in the case of ACIT-I vs. Agra Development Authority [2018 (2) TMI 756 - ALLAHABAD HIGH COURT] it was observed by the Court that assessee had not obtained registration by practicing fraud or collusion or concealment of any material fact, but in the present case there is nexus of corruption by way of bribe and criminal misconduct by the assessee trust. - Decided against Assessee.
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