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2016 (12) TMI 1076 - AT - Income TaxGrant of registration u/s. 12A and 80G refused - non Charitable purpose - Held that:- It appears that the conclusion reached by the CIT that the assessee trust is profit oriented entity and not the charitable institute, is based only on the ground that the assessee would charge hefty fees from the students. The ld. CIT has failed to throw any light on the aims and objects of the society and to examine whether the activities of the society are to achieve the aims and objects as per its memorandum. Simply because the appellant will charge fee from the students, in our opinion, it does not go to suggest refusal of registration to the assessee society. CIT has also observed that governing body of the society belongs to close family members, which also does not bar for the formation of society. The society is a separate entity from its members and is governed by the Societies Registration Act, 1960 and each society makes separate Rules and Regulations. The ld. CIT has further noted that a sum of ₹ 68,531/- has been incurred towards advertisement expenditure for the purpose other than education. In this regard, the ld.AR clarified that it was incurred for hiring of faculty members for running the institute. Therefore, the expenses incurred on advertisement for hiring talented faculty members cannot be said to have incurred for other than educational purpose. Therefore, the allegation made by the ld. CIT that the assessee incurred advertisement expenditure for procuring more admission of the students with sole motive of earning profit, is wrong. Thus we allow the appeal of assessee for registration u/s. 12AA of the IT Act. - Decided in favour of assessee For approval u/s. 80G the assessee should be given one more opportunity of hearing before the ld. CIT to put its case and comply with the notices issued to him before finally deciding the issue of approval u/s. 80G.
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