9911796707
TMI Blog2012 (8) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... i) That aim and objects of the society are of charitable nature and their being no violation of provisions of sec. 2(15) of the Income Tax Act, 1961, the order passed by DIT(E) is not sustainable under the law. (iii) That the observation and finding of the DIT(E) are without proper appreciation of facts and whole basis of order u/s 12AA(3) is illegal, arbitrary and misconceived." 3. Brief facts are: Assessee society was granted registration u/s 12A vide DIT(E)'s order dated 23-5-2001 and benefit of exemption u/s 80G till 31-3-2011. It is not disputed that the aims and objects of the society remained the same and there is no change therein. The society was formed mainly to promote the cause of education in general and cause of the educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office complex, which indicated the intention of indulging in commercial activities. (ii) The commercial property has not at all been used for any of its objectives i.e. spreading education, as claimed to be the object of the assessee Society. (iii) The purchase of commercial property was not incidental to attainment of any objective. The property being commercial, without any use for its aims and objectives, the investment was for non-charitable purposes. 3.4 On these observations, DIT(E) withdrew the registration u/s 12A. "7. In the instant case, the society is earning from two different heads i.e. rental income, from property and from sale of shop. The purchase of commercial property by the society is not incidental to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal income and in shops so that income can be earned by selling those subsequent can by no stretch of imagination be construed as application of funds/money for charitable purposes by the society. Moreover, the such investment cannot be treated as incidental to attainment of its aims and objects as per MOA. 9. In view of amended provisions of Section 2(15) of the Income-tax Act, 1961, the activity of the society relating to investment in purchase of commercial property does not fall within the meaning of Charitable activity, as the investment in commercial property and earning rental income as well as income from sale of shop out of the property purchased are hit by the provisions of the amended provisions of section 2(15), Keeping in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely:- (a) Such person specifies, by notice in writing given to the Assessing Officer in the prescribed manner, the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years; (b) The money so accumulated or set apart is invested or deposited in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw does not mandate any extra bar. 7.3 Coming to the other aspect that because the assessee is not carrying out any educational activity in this commercial property, therefore, the investment becomes for non-charitable purposes and the assessee has endeavored to enter into business operations. In our view the assessee's charitable objects include spreading education and opening of schools; investment even in commercial property assets remains charitable purposes so long as the income generated by it is applied to charitable objects. It has not been demonstrated that the assessee applied rent received from these properties to any non-charitable purposes. Besides, it has not been demonstrated that the assessee's intention was to enter in bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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