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2021 (8) TMI 767 - AT - Income TaxExemption u/s 11 - CIT(E) has rejected the application for registration u/s 12AA - proof of Charitable activity u/s 2(15) - assessee entered into franchise agreement - HELD THAT:- From the perusal of the order passed by the CIT exemption it is clear that the CIT exemption has denied the registration to the assessee society on the basis of the franchise agreement entered between the assessee and that of the Zee Learn Ltd. however the running of the school, duly affiliated with the central board of secondary education, has not been denied by the CIT exemption, while rejecting the application for registration of the assessee. Running of the school after affiliation with the CBSE Board, is a charitable activities within the four corners of section 2(15) of the Act and the assessee is entitled to the registration u/s 12AA - AO at the time of assessment is duty bound to examine the permissibility of the franchise fees paid by the assessee to ZLL within the four corners of law. In our considered opinion merely because the assessee entered into franchise agreement with ZLL will not made the activity of the assessee non charitable. The predominant and sole purpose of the assessee’s activities are imparting of education after affiliation with the CBSE. In the light of the above we deem it appropriate to direct the CIT(E) to grant registration to the assessee from the date of application. - Decided in favour of assessee.
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