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2020 (2) TMI 576 - HC - Income TaxExemption u/s 11 - registration under Section 12AA - violation of Section 40A(3) - HELD THAT:- The finding recorded by the Tribunal that Smt. Sunita and Smt. Sangeeta were possessing qualifications for being Teachers has not been controverted. There is no challenge to the fact that during the relevant time as per the circular issued by the Government, salary of PGT Teacher was fixed as ₹ 31,240/-, whereas both the teachers were receiving salary of ₹ 20,000/- and ₹ 18,000/- respectively. In such circumstances, there is no violation of Section 13(1)(c). It is pertinent to mention here that the salary paid is much less than the prevailing salary. There is no direct or indirect benefit given to the members, rather they were being paid consideration for the services rendered. The scope at the time of processing the application u/s 12AA of the Act is to satisfy with regard to the objects of the trust or the institution and the genuineness of its activities. Apart from the objections mentioned above, the CIT had not recorded any dissatisfaction with regard to the objects of the assessee or with regard to the genuineness of its activities. Tribunal rightly concluded that the issue with regard to violation of Section 40A(3) of the Act and the nature of donations received can be duly considered while finalising the assessment for the relevant period. There is no illegality or error in the view taken by the Tribunal. However, we may hasten to add that subsequently if the revenue is satisfied that the activities of the assessee are not for charitable purpose, it can always initiate action for cancellation of registration under sub-section (3) of Section 12AA - No substantial question of law arises.
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