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2012 (5) TMI 478 - ITAT, CHENNAIRegistration u/s 12AA - Assessee-Society had earlier been granted registration u/s 12AA by the then CIT, Madurai, vide his order in C.No.464/24/07- 08/CIT-I dated 12.10.2007, for the assessment year 2007-08 and onwards, but the application for recognition u/s 80G was rejected by the same CIT vide his order dated 24.12.2008 - It is clear that the ld. CIT has been empowered to either continue registration, once granted u/s 12A(a) or else, he can cancel the same if the requisite conditions are no longer found to be fulfilled - From the Income and Expenditure Account of these years, it is clearly seen that the Society was receiving income from laces and embroidery articles, income from coconut shell, SHGs contribution, own contribution, grants received, donations received, interest received, etc. The financing activities undertaken by the Society is clearly evidenced from these facts - It is true that certain amount of commercial activity is permitted under the provisions of the Act, but this has to be only a by-product of 'charitable activities' with a certitude that surplus so generated out of commercial activity are utilized for the charitable objects of the Trust/Society and not for personal use of settlers/beneficiaries - commercial activity in such cases is permissible as per the requirement of section 11(4)/11(4A) and not as per the provisions of section 11(1)(a) of the Act. The commercial activity should aim at achieving end of the trust which is furtherance of its objects and it should not be the motive of the Trust to work for profit - Under these circumstances, we are also satisfied that the Society has ceased to be a genuine Society to be eligible for registration u/s 12AA - Decided against the assessee
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