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TMI Blog2012 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and accepted by the Assessing Officer ? 2. Holding that registration granted u/s 12AA automatically makes eligible for exemption u/s 11 of the Income Tax Act." 2. The brief facts of the case are that the assessee filed return on 31st October, 2006 in the status of local authority. During the course of assessment proceedings, the assessee filed revised return on 27.03.2008 claiming exemption under section 11 of the Income Tax Act, 1961 ('the Act' hereinafter) in view of registration under section 12A of the Act. The registration under section 12A was granted by CIT, Gwalior vide order dated 07.08.2007 in pursuance of directions given by the I.T.A.T., Agra Bench vide order dated 29.03.2007. The Assessing Officer did not accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) "4. Appellant's submission along with assessment order and records have been considered carefully. Remand report of the AO and reply to the same by the appellant have also been seen. AO appears to be acting under mistaken belief that since decision of Hon'ble ITAT, Agra which has been upheld by jurisdictional Hon'ble MP High Court granting registration u/s 12A to the appellant is not applicable in its case as appeal before Hon'ble Supreme Court is pending. It can not be too vehemently emphasized that it is of utmost importance that, in disposing of quasi-judicial issues before them, AOs are bound by the decisions of the appellate authorities. The principles of judicial discipline require that the orders of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital expenditure of Rs.4,70,09,157/- has also been applied towards its designated activities. As per Forma 10B total application of its funds is Rs.3,89,25,840/- from receipts of Rs.3,71,21,929/- meaning thereby that the appellant has applied more than prescribed percentage of its income for the furtherance and in the attainment of its objectives. Another contention of the AO that even if the appellant is covered u/s 12A of the IT Act, it would still not be entitled to exemption because its income is neither derived from the property held under trust nor its income is from voluntary contributions also has no merit because the expression "property" used in section 11 of the IT Act is of wide amplitude and includes the business undertaking it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose since it charges 2% from trade from the traders as Mandi Fee and out of this, 1% is directly deposited to the State Government. The ld. Departmental Representative submitted that by merely holding registration under section 12A the assessee is not automatically entitled for exemption under section 11 of the Act. The Ld. Departmental Representative submitted that the Assessing Officer did not get occasion to examine the condition of section 11 of the Act as at the time of assessment the Assessing Officer rejected the assessee's claim by not accepting the revised return filed by the assessee. 4. Ld. Authorised Representative, on the other hand, relied upon the order of the CIT(A). 5. We have heard the ld. Representatives of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar facts to the facts of the case under consideration. Therefore, the assessee is entitled for exemption under section 11 of the Act. The contention of the Ld. Departmental Representative that the assessee Samiti has deposited 1% fund to the State Government out of 2% charges made by the traders which shall not amount to charitable purpose, this contention of the Ld. Departmental Representative is not acceptable as the fund transferred to the State Government and State Government always utilizing such fund for welfare of person of the State which amounts to charitable purpose. We, therefore, reject this contention of the Ld. Departmental Representative. We find that the CIT(A) has examined the issue on merit. The CIT(A) provided opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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