TMI Blog2009 (7) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. In Sanjeevamma Hanumanthe Gowda Charitable Trust [ 2006 (3) TMI 91 - KARNATAKA HIGH COURT] it has been held that the authorities have to satisfy genuineness of the activities of the trust or the institution and how the income derived from trust property is applied to charitable or religious purpose and the nature of the activities by which the income derived by the trust. In Medical Accident Prevention Society [ 2004 (9) TMI 79 - KERALA HIGH COURT] it has been held that the relevant consideration while considering the application under s. 12A of the Act is that the trust of the institution to be a charitable one having charitable purposes. In Fifth Generation Education Society [ 1990 (5) TMI 38 - ALLAHABAD HIGH COURT] it has been held that while considering the application under s. 12A of the Act, the CIT is not required to examine application of income of trust; he has to see only whether objects of trust are charitable or not, objects of general trust do not cease to be charitable, no activity need be carried on by society for obtaining registration. In the present case the objects of the assessee society are clearly charitable, being for the purpose of educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the field of education. (i) To establish and run all types of educational institutions for women. (j) To take over the management and control of any educational institutions. 4. The learned CIT observed that a bare reading of the objects of the assessee society revealed that its objects were general and were not specific in nature; that especially, the objects mentioned at serial Nos. (d) to (h) could not be held as charitable, if the beneficiaries for the same were not defined; that in the assessee's case, the beneficiaries were not defined; that though, the assessee had submitted that activities were being made to promote high quality education, which is a charitable activity under s. 2(15) of the IT Act; that income of educational institutions is also exempt under s. 10(23C) of the Act, but such exemption is available to an educational institution which is engaged solely in education; that "education" means giving education to the students in the premises of the institution and the institution is not to be engaged in other activities; that as used in s. 2(15) of the Act, the word "education" means schooling or training given to the young in preparation for future life, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition to promote the aims and objects of the society could be promoted as patron/chief patron of the society by the executive committee of the society by a 2/3rd majority. The CIT observed that thus, the organizational structure of the society, as given in its registered instrument, vested full power in the hands of its promoter members and it even allowed the transferring of membership as well as powers to their offspring; that besides this, life members were also to be proposed and seconded by promoter members. It was seen that the rules and regulations of the assessee society had been signed by 12 members, 11 of whom were in the executive committee of the assessee society, It was observed that as per the rules of the society, 7 promoter members would remain in the executive committee compulsorily and the general body would elect the rest of the members from the members of the general body; that this revealed that the entire process of admission of members had been confined in the hands of the promoter members and the admitted members were either family members or relatives. It was seen that the society was thus a family organisation and the membership thereof was of closed memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had submitted an application for granting exemption under s. 80G of the IT Act simultaneously; that in the course of proceedings concerning with application, the assessee had objected to the enquiries being carried out; that s. 12AA of the IT Act enacted to provide for a procedure to be followed for grant of registration to a trust or institution; that on enquiry, it had been found that the following persons had provided loans through account payee cheques to the assessee, the cash had been deposited immediately before that, in the bank accounts of: (i) Shri Amit Kumar Garg, 223, Turab Nagar, Ghaziabad-Rs. 2,00,000; (ii) Smt. Dimple Garg III/M-R/5, Nehru Nagar, Ghaziabad-Rs. 2,00,000; (iii) Smt. Seema Singhal, F-25, Sector 18, Noida-Rs. 1,00,000; (iv) Shri Sanjeev Kumar, House No. 998, Vivekanand Nagar, Ghaziabad-Rs. 2,50,000; (v) Smt. Smit Garg, 14, Turab Nagar, Ghaziabad-Rs. 2,00,000. The CIT observed that this casts a shadow over the genuineness of the loans and the capacity of the donors for providing the loans; that the registration instrument was not having any clause about the utilization of surplus or profit, sources of income of the society, etc. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wa Niyas Uttaranchal vs. CIT (2006) 105 TTJ (Del) 761; (v) Sanjeevamma Hanumanthe Gowda Charitable Trust vs. Director of IT (Exemption) (2006) 203 CTR (Kar) 533 : (2006) 285 ITR 327 (Kar); (vi) Medical Accident Prevention Society vs. CIT (2005) 194 CTR (Ker) 475 : (2005) 278 ITR 165 (Ker); (vii) St. Don Bosco Educational Society vs. CIT (2004) 84 TTJ (Lucknow) 805 : (2004) 90 ITD 477 (Lucknow); (viii) Aryan Educational Society vs. CIT (2005) 94 TTJ (Del) 462 : (2005) 93 ITD 546 (Del); (ix) Agricultural Produce Market Committee, Telhara Ors. vs. CIT (2005) 97 TTJ (Nag) 165; (x) Fifth Generation Education Society vs. CIT (1990) 87 CTR (All) 169 : (1990) 185 ITR 634 (All); (xi) CIT vs. Nanjibhai Dungerbhai (1989) 179 ITR (St) 61. It has been contended that the assessee complied with all the requirements of s. 12A of the Act and as such, registration ought to have been granted to the assessee. It has further been contended that the objects of the assessee are charitable within the meaning of s. 2(15) of the Act and they are specific; that moreover, the beneficiaries are public at large; that all the objects of the assessee are educational objects; that in any case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutions, to provide help to deserving students, to establish libraries and reading rooms, to publish books, to arrange lectures, to establish hostels for students, working women and others, to establish, run and assist all types of research projects concerning education and to take over the management and control of any educational institution. One of the objects of the society is also to establish and assist schools for the blind, deaf and the dumb. Therefore, it cannot be denied that the objects of the society are for the furtherance of education. Education, now, is a charitable purpose within the meaning of s. 2(15) of the IT Act. It would be apt to quote s. 2(15) here: "Sec. 2(15): 'Charitable purpose' includes relief of the poor, education, medical relief and the advancement of any other object of general public utility." 12. The learned CIT has observed that the objects of the assessee society are general rather than specific. We, however, do not find it to be so. As discussed, all the objects of the assessee society are towards education. They include assistance to students in the form of stipend, scholarship, cost of books, etc. The assessee has to establish and ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e society. It also does not matter that some of the members are practising chartered accountants. In response to the questionnaire issued to the assessee, the assessee vide reply dt.7th March, 2005furnished all the requisite information. Vide letter dt.11th Feb., 2005, the Uttar Pradesh Government has granted 'no objection' regarding LL.B. course under the Bar Council of India to the assessee's Reliable Institute of Law (Ghaziabad). In Acharya Sewa Niyas, Uttaranchal vs. CIT, it has been held that while dealing with an application for registration under s. 12AA of the Act, the jurisdiction of the CIT is confined to examination of the objects of the applicant trust and genuineness of its activities. In Sanjeevamma Hanumanthe Gowda Charitable Trust vs. Director of IT (Exemptions), it has been held that the authorities have to satisfy genuineness of the activities of the trust or the institution and how the income derived from trust property is applied to charitable or religious purpose and the nature of the activities by which the income derived by the trust. In Medical Accident Prevention Society vs. CIT, it has been held that the relevant consideration while considering the applica ..... 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