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2020 (2) TMI 579 - HC - Income TaxExemption u/s 11 - grant registration u/s 12AA - proof of charitable activity u/s 2(15) - HELD THAT:-CIT while processing the application for registration has to look into the genuineness of the activities of the trust and satisfy himself about the genuineness of the activities. The issues raised with regard to the security deposit being not in comparison vis-a-vis the rent received will not have impact on the genuineness of the activities. It is an admitted case that the security received was duly reflected in the books of account. Similarly, the enrouting of advance fee is also an issue with regard to the accounting. These having been shown in the books can be dealt with in detail by the Assessing Officer while framing the assessment and allowing exemption under Section 11 of the Act. The present stage would not be appropriate for the same. Additional land purchased, the Tribunal rightly observed that CIT has a power under Section 12AA(3) of the Act in case of utilisation of the said land against the aims and objects of the society. The grievance against the surplus income not being reasonable is baseless in absence of any challenge to the finding recorded by the Tribunal that excess income has been ploughed back by the society for furtherance of its object. There is no illegality in the order of the Tribunal directing grant of registration to the society. However, it would be needless to state that in case the revenue subsequently comes to the conclusion that the activities of the society are not for charitable purposes, it would always be at liberty to initiate action in accordance with law including invoking of sub-section (3) of Section 12AA of the Act. No substantial question of law
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