Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 7 - AT - Income TaxRegistration u/s 12AA rejected - as per CIT activity of the assessee cannot be termed as charitable as it has been systematic generating surplus from year to year and the amount has not been applied for its objectives - accounts are not audited and higher interest income has been earned from the surplus so generated, etc. - whether application was rightly rejected seeking registration u/s 12AA of the Act on the basis of the reasons stated herein above? - HELD THAT:- In CIT Vs. Surya Educational & Charitable Trust, [2011 (10) TMI 47 - PUNJAB AND HARYANA HIGH COURT] wherein held that the object of section 12AA of the Act, is to examine the genuineness of the objects of the Trust, but not the income of the Trust for charitable or religious purposes. The stage of application of income is when such Trust or Institution files its return. At the stage of granting registration, the Ld. CIT has to restrict himself to the objects of the assessee and Genuineness of the activities. The CIT has not to examine whether the funds have been applied or not. In the case in hand, the Ld. CIT rejected the application substantially on the basis that the assessee has accumulated funds which are not been ploughed back for charitable purposes. The profits earned are invested in ever increasing FDRs to earn interest income instead of utilizing for charitable purposes. The explanation of the assessee for accumulating the funds is that it planned for future expansion of technical education in state. The assessee has also applied funds for constructing the hotels for boys and girls, auditorium with the sitting capacity of 3000, campus development to establish green campus. The assessee has also established UITs at Jhabua & Shadol for which the capital expenditure will be approximately ₹ 100 crores. In our considered view, the Ld. CIT has not considered the explanation in the light of the binding precedents. Set aside the order of the Ld. CIT(E) and restore the issue of granting of registration to his file to re-consider the same - Decided in favour of assessee for statistical purposes.
|