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2021 (8) TMI 766 - AT - Income TaxExemption u/s 11 - Rejection of its application seeking registration u/s 12AA - HELD THAT:- There was no hard and fast rule as to what was the specific percentage being adopted for the purpose of “substantially financed” till the insertion of Rule 2BBB inserted w.e.f. AY 12/12/2014. We understand that the issue before the CIT(E) was regarding grant of registration u/s 12AA and that of 10(23C) (iiiab). As such, the scope of enquiry before grant of registration u/s 12AA was limited to the objects being charitable in nature and activities were genuine. Once the objects have been accepted to be educational, the Commissioner is required to see that the activities are genuine and in consonance with the objects at the time of grant of registration as in case of “CIT v Shri Shirdi Sai Darbar Charitable Trust” [2017 (4) TMI 123 - PUNJAB AND HARYANA HIGH COURT] and in case of “CIT V Red Rose School” [2007 (2) TMI 575 - ALLAHABAD HIGH COURT]. In the case at hand, the assessee was claiming exemption u/s 10(23C)(iiiab) and had applied for registration u/s 12A as it was expecting a decline in Government grants. The assessee is free to avail registration under any alternative provision if more than one alternative were available, so it decided to apply for registration u/s 12A under the provisions of law as per principle approved in case of “CIT v Beant College of Engineering & Technology”, [2019 (5) TMI 631 - PUNJAB AND HARYANA HIGH COURT] and same preposition followed by in case of “Arya Shiksha Mandal KMV Campus v CIT”[2017 (3) TMI 1765 - ITAT AMRITSAR] We hold that the order under appeal is unsustainable and thus reversed. CIT(E) is directed to grant registration to the appellant forthwith, preferably within one month time of furnishing copy of this order.
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