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2020 (8) TMI 359 - AT - Income TaxExemption u/s 11 - application for registration u/s 12AA rejected - reason specified by the Ld. CIT (E) for rejecting the assessee’s application for registration u/s 12AA of the Act is that since no activities had been undertaken by the society, it was not possible to register it presumably because it was not possible to form satisfaction about whether the activities of the society were genuine - HELD THAT:- This issue has been settled in the case of Ananda Social & Educational Trust vs. CIT [2020 (2) TMI 1293 - SUPREME COURT] as held that Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust. Undisputedly, in the present case, the Ld. CIT (E) has not recorded a finding that the activities of the Society were not genuine or were not in accordance with the objects of the Society. As per CIT (E) that no activities had been carried out by the assessee society. Therefore, it is our considered opinion that the Ld. CIT (E) has unnecessarily enlarged the scope of the mandate to be exercised by him at the time of grant of registration u/s 12AA. He has gone into an all together different consideration for grant of registration whereas he was only to consider whether the objects and the activities were genuine were not. Thus, the observation of the Ld. CIT (E) that since no activities were carried out, the registration cannot be granted, does not hold good. CIT (E) went on to make an irrelevant observation that the subscription fee of ₹ 3 & ₹ 5 to be charged from various categories of members was high and, therefore, the activity of the society could not be considered charitable. We find ourselves unable to be in agreement with the Ld. CIT (E) as this being a valid reason for refusal to grant of registration u/s 12AA. The quantum of fee/subscription only without any other corroborating finding establishing that the activities are not charitable cannot be a ground for refusal for grant of registration and we hold that registration could not have been denied on this ground also. CIT (E) has given altogether invalid reasons for refusing the grant of registration u/s 12AA of the Act. He has also chosen not to comment adversely on the nature of the objects which strengthens the cause of the assessee society. We set aside the order of the Ld. CIT (E) by holding that the Ld. CIT (E) has dismissed the application for registration without any justifiable reason and by considering completely irrelevant factors. CIT (E) has also not recorded any adverse finding that the objects of the society were not charitable or were non-genuine. CIT (E) is directed to grant of registration u/s 12AA of the Act to the assessee Society. - Decided in favour of assessee.
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