TMI Blog2010 (2) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition of Rs.4,03,500/- by the AO in the assessment proceedings for which the appeal is pending before the learned CIT(A) cannot be said to be an activity for non-charitable purpose and therefore, the society/institution in the present case cannot be held to be for non-charitable purpose on this ground. Decided in favour of Assessee. - I.T.A. No. 241/Del/2009 - - - Dated:- 10-2-2010 - A.D. Jain, B.P. Jain, JJ. V.K. Goel, Adv., for the Appellant Banita Devi Raorem, Sr. DR. for the Respondent ORDER B.P. Jain: This appeal by the assessee is directed against the order of the learned Commissioner of Income-tax, Meerut, dated 19.12.2008. 2. All the grounds raised by the assessee are taken together since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance sheet showed unsecured loans aggregating to Rs.10,21,300/-. The then CIT directed the A.O. to verify the genuineness of these loans. The A.O. found that of the 44 creditors, 33 had advanced loans in cash. The assessee was unable to prove the creditworthiness and genuineness of these creditors. The A.O. after examination of these creditors held that the promoters of the society had introduced their unexplained money in the garb of loans. The A.O. also found that the assessee had not carried out any charitable activity in pursuance of its objectives. The A.O. also found that at the relevant date the assessee was not affiliated to any educational Board. 2. In view of the above findings, proceedings u/s 12AA(3) were initiated by the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawn prior to the enactment of section 12AA(3). After enactment of section 12AA(3), registration can be cancelled if the reasons enumerated therein are satisfied. 7. In the instant case, after carrying out the enquiry ordered by the CIT, the Addl. CIT initiated action u/s 147 against the assessee society. After examining the alleged depositors, the addl. CIT found that deposits amounting to Rs.4,03,500/- could not be proved to be genuine. It is the assesee's contention that (a) it was able to prove genuineness of the rest of the loans (b) this order has been appealed against. I would like to observe that Rs.4 lakhs is a substantial sum and till the Assessing Officer's order holds it has to be taken as fully operative. If a society i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA of the Act where the Commissioner on receipt of application for registration of a trust or institution calls for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of the activities of the trust or institution and may also make such enquiries as he deems in this behalf about the objects of the trust and institution and genuineness of its activities he shall pass an order in writing registering the trust or institution and if he is not satisfied, shall pass an order in writing refusing registration of a trust or institution. In the present case as mentioned hereinbefore the assessee had been granted registration by the learned Commissioner of Income-tax vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the assessee has submitted all the required documents before the Assessing Officer during the assessment proceedings but the additions have been made by the Addl. Commissioner of income-tax/Assessing Officer since the source of deposit of Rs.4,03,500/- could not be proved genuine. There is no finding of the Assessing Officer that the said source of deposit is from the members of the society. We are convinced with the arguments of the learned counsel for the assessee that there is no finding to this effect in the order of the Assessing Officer that the amount has been contributed by the members of the society but as observed by the learned CIT that the society has been brought into existence only to absorb the unexplained weal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are Trust vs. CIT (2009) 27 SOT 321 (Del); Bharti Vidyapeeth vs. ITO (2009) 28 SOT 32 (Pune); and Anand Charitable Trust vs. CIT (2009) 33 SOT 21 (Del). Similar are the facts of the present case where the cancellation of registration by the Commissioner of Income-tax had been held to be invalid. Therefore, in the circumstances and facts of the case and the decisions relied upon hereinabove of various authorities, the learned Commissioner of Income-tax has to satisfy about the genuineness of the activities of the trust/institution and not about the income derived from such trust/institution and none of the activities or application of income has been held to be for non-charitable purpose by the learned Commissioner of Income-tax, the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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