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2021 (10) TMI 744 - AT - Income TaxRegistration u/s 12AA denied - Payment of franchisee fee - Denial of exemption u/s 12AA on the issue that the assessee is a “franchisees of Zee Learn Ltd." - charitable activities of the school in view of the substantial evidences of concession fee, given to the poor & deserving students - HELD THAT:- We understand that as such nothing having been doubted as regard to the aims and activities of the Assessee society being charitable is concerned - if there is complete waver of fee, how the society would run the school and further whatever more evidence was required to be given has not been substantiated by the CIT (E). In our view, if on this issue, no adverse inference have been drawn by the PCIT(E) by accepting main object of the society is to carry-out the object of the education only, then refusal to grant 12 AA to the assessee society was not justified. Nothing has been doubted and for the purpose of 12A only two conditions are to be required to be satisfied that one with regard to the activities of the trust and the second with regard to the aims & objects of the society as per the decided case laws on this issue which have been addressed in favor of the assessee by the earlier order of the Coordinate Bench as placed in the paper book. As regards to the issue of profit motive, it had clearly been held that profit motive should not be predominant and for that various decisions have been cited has held that the denial of registration is being made on the issue of the franchise fee paid to ‘M/s. Zee Learn Ltd.’ and ignoring the finding is already in favor of the assessee in the earlier order of ITAT [2018 (9) TMI 954 - ITAT AMRITSAR] and, therefore, the CIT (E) not following the order of the Hon’ble ITAT is against judicial discipline and rejecting the application for registration u/s 12AA, which issue had already attained finality is bad in law and, thus, the PCIT (E) was required to grant registration to the assessee u/s 12AA. The jurisdiction of the PCIT(E) was being limited to verification of two issues, one with regard to the ‘lease hold land’ and the second about the fee concession and on both accounts, and since, the CIT (E) has not drawn any adverse inference and, therefore, in our view, the order of CIT(E) denying the registration u/s 12AA is bad in law - we direct the PCIT(E), Chandigarh to grant registration to the assessee society from the date of its application. - Decided in favour of assessee.
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