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2020 (9) TMI 424 - HC - Income TaxExemption u/s 11 - Whether the appellant is entitled to a registration u/s 12AA - rejected the application on the ground that the assessee's activity of imparting 'financial education/awareness' is a service for price, to the investor in the field of investments; the assessee's activity is designed in such a way that what it receives in the form of fee from the client for imparting financial education/awareness is always higher than what is spent for imparting such education/awareness to the said clients - assessee has generated surplus - HELD THAT:- Tribunal erred in holding that the word “education” should be given a restrictive meaning and we respectfully agree with the decision in the case of Gujarat State Cooperative Union [1992 (2) TMI 74 - GUJARAT HIGH COURT] and Ahmedabad Management Association [2014 (8) TMI 638 - GUJARAT HIGH COURT] What is important to note is that the surplus cannot be distributed, which is clearly spelt out in the Memorandum of Association, which states that the income and profit of the company, whatsoever derived shall be applied solely for the promotion of its objects as set forth in the memorandum; no portion of the income or property aforesaid shall be paid or transferred, directly or indirectly, by way of dividend, bonus, otherwise by way of profit to persons who, at any time are, or have been member of the company or to any one or more of them or to any person claiming through any one or more of them. It is stated that except with the previous approval of the Central Government, no remuneration or other benefit in money or money's worth shall be given by the company to any of its members whether, officers or servants of the company; in case of winding up or dissolution of the company, after satisfaction of all the debts and liabilities, any property whatsoever, the same shall not be submitted amongst the members of the company, but shall be given or transferred to such other company having objects similar to the objects of the assessee company. The relevant portions of the Memorandum of Association, which we have referred to, also find place in the licence issued under Section 25 of the Companies Act by the Regional Director of Company Affair. Rejection of the application filed by the assessee for registration under Section 12AA is erroneous on account of misreading of the scope of the decision of the Hon'ble Supreme Court in Loka Shikshana Trust [1975 (8) TMI 1 - SUPREME COURT]. - Decided in favour of the assessee
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