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2021 (1) TMI 467 - AT - Income TaxExemption u/s 11 - Denying the grant of registration u/s 12AA - appellant society was formed with the mixed objects like religious and non-religious activity and the appellant society was registered u/s 12A since 1977-78 - As stated that the original certificate of the registration u/s 12A was misplaced and on the legal advice filed fresh application in Form 10A for grant of registration u/s 12AA of the Act on 04.03.2020 - HELD THAT:- It cannot be said that merely because some of the objects of the appellant society are religious in nature it cannot be said that the objects are not charitable in nature. Thus, the order of the ld. Commissioner of Income Tax (Exemption) on this score cannot be upheld. Merely because the appellant society is in receipt of income from letting out Event Hall and Bhaktniwas it cannot be said that the activities of the appellant society are not genuine. Because, there is no bar under the law to earn income for the purpose of attaining the main objects of the trust. As regards to the reasoning of the ld. Commissioner of Income Tax (Exemption) that the appellant society had invested surplus funds of the trust in the form of FDs and applicability of the proviso to section 2(15) of the Act, it is settled proposition that the issue of grant of registration u/s 12AA of the Act and the examination of exemption u/s 11 of the Act are two different and distinct procedures prescribed under the Act. The issues of exemption u/s 11 of the Act cannot be examined at the stage of grant of registration u/s 12AA of the Act because the stage of examination of issues u/s 11 of the Act would arise only after grant of registration u/s 12AA of the Act. In Goa Industrial Development Corp. vs. CIT [2020 (2) TMI 366 - BOMBAY HIGH COURT] wherein the Hon’ble Jurisdictional High Court held that the mere introduction proviso to section 2(15) of the Act by itself would not render the activities of the assessee trust as non-genuine activities, so as to, entitle Commissioner of Income Tax (Exemption) to cancel and deny the registration u/s 12AA. We find from the impugned order except for stating that the activities are not genuine because of the applicability of the proviso to section 2(15) of the Act and the investments in the FDs out of the income there is no other allegation against the appellant society. In the circumstances, we set-aside the impugned order and direct the ld. Commissioner of Income Tax (Exemption) to grant the registration u/s 12AA - Decided in favour of assessee.
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