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2020 (3) TMI 1114 - AT - Income TaxExemption u/s 11 - registration u/sec. 12AA denied - Charitable activity u/s 2(15) - CIT(E) has observed that the trust in its MoA has been mentioned that on dissolution, the land will be given back to the heirs of the donors, which is not as per law - HELD THAT:- Assessee-society is running an old age home in 03 acres of land situated in Vizianagaram. Assessee is providing paying guest accommodation for the needy. Paying guest accommodation is said to be provided to those who are admitted by their kids or nearby relatives. The expenditure for running the organization is from interest income earned on bank deposits held by it. The deposits held by the organization are said to be out of funds donated by the public. Enquiries revealed that some donors initially donated each ₹ 1.00 lakh to the “Prema Samajam‟ as one time donation for the benefit of it and the donations so collected were deposited in bank accounts held by it. Some donations are extended by public for “Annadhanam Scheme‟ for benefit of the assessee. Apart from the donations accepted from public, it also receives sponsorships for providing food from public on special occasions i.e. birthdays, marriage days etc. Prema Samajam collects ₹ 3,000/- from public to provide food to the inmates on the day of their choice who want to sponsor food for the inmates of it for arranging food for all the 100 inmates presently housed. Some Doctors are learnt to be visiting Prema Samajam extending their free service to treat the inmates on fortnightly basis. One more building also sponsored by the Visakha Dairy Trust, Visakhapatnam. After examining the objects and activities carried by the assessee and also report submitted by the ITO (Exemptions), Visakhapatnam which reveals that the assessee is running old age home providing free shelter and food to at least 50 destitutes and also extending services to the poor people and free medical treatment. The source of income of the assessee is donations collected from the public and interest income deposited in the banks. Assessee is solely existed for the purpose of running society to carry the charitable activities, even assessee is charging some amount from the people who are admitted in the paying guest accommodation and expenses borne by the children or relatives. Ultimately all the funds are used for the benefit of the people who are admitted in the society, no profit making activity is carried out by the assessee. Under these facts and circumstances of the case, we are of the opinion that without there being any doubt, the assessee is running its society in charitable lines and is deserves to be granted registration u/sec. 12A of the Act. CIT(E) rejected the 12A registration on the ground that clause mentioned in the gift deed is not in accordance with law is concerned; we find that the above reason given by the ld.CIT(E) is not correct in rejecting the 12A registration to the assessee. CIT(E) not at all examined what the assessee‟s activities whether assessee actually carrying charitable activities are not. Without doing so, the ld. CIT(E) picked up an irrelevant clause in the gift deed and rejected 12A, CIT(A) is not correct. We, therefore, granting 12A to the assessee. - Decided in favour of assessee.
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