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2021 (3) TMI 223 - AT - Income TaxExemption u/s 11 - registration u/s. 12AA denied - DR submits that the assessee having no registration u/s. 12AA of the Act and made false claim of exemption u/s. 11(1) - Regarding the utilization of surplus raised from pre-primary and primary school no details filed to show that such surplus has been utilized in secondary division of assessee’s school - HELD THAT:- As assessee was enjoying claim of exemption u/s. 11 of the Act from A.Y. 2000-01 onwards and granting of certificate u/s. 80G from 01-04-2012 onwards till date. CIT(Exemption) did not dispute the same. We note that the returns of income filed by the assessee have also been accepted by the respondent-revenue. The contention of Revenue is that no assessment from A.Ys. 2014-15 to 2018-19 selected for scrutiny and since the CIT(Exemption) found during the process of application for registration u/s. 12AA of the Act reopened the assessments from A.Ys. 2014-15 to 2018-19. We note that the AO filed its factual report in response to direction of CIT(Exemption) which is reproduced of the impugned order which clearly shows that the respondent-revenue allowing the claim u/s. 11 of the Act prior to A.Y. 2016-17. Therefore, no dispute in respect of granting exemption u/s. 11 of the Act treating the assessee having got registration u/s. 12AA of the Act and u/s. 80G of the Act. Merely because profits have resulted from the activity of imparting education would not result in change of character of the institution that it exists solely for educational purpose - See SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION (AND OTHER REFERENCES) [1979 (11) TMI 1 - SUPREME COURT] In view of the law laid down in the case of St. Peter’s Educational Society [2016 (6) TMI 536 - SUPREME COURT] by following the decision in the case of Queen’s Educational Society [2015 (3) TMI 619 - SUPREME COURT] we hold that the assessee is entitled for grant of registration u/s. 12AA of the Act from the date of application and CIT(Exemption) is directed to grant the same. Accordingly, the grounds raised by the assessee are allowed.
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