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TMI Blog2013 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of Income Tax (E) passed under Section 12AA(3) read with Section 12 of the Income Tax Act cancelling the registration granted to the assessee under Section 12(A). 2. The entire case of the revenue was that since the assessee, in the assessment year 2005-2006, had invested in commercial property at Bangalore and it was not for a charitable purpose and further that in thesaid property no educational activity was carried out which was the objectof the assessee. The respondent/assessee had contended that it was permissible for it to invest in immovable property in terms of section 11(5) of the said Act. It was also contended that though the investment was in commercial property, the income generated from it was applied for charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money referred to in clause (b) of sub-section (2) shall be the following, namely :- ...... (x) Investment in immovable property. 7.1. Plain reading of provisions of sec. 11 (2)(b) lay down that 85% of the income is to be applied to charitable purposes or set apart and the moneys accumulated or set apart can be invested or deposited in the forms or modes specified in sub-sec.(5). 7.2. Clause (x) of Sub sec. (5) to sec. 11 prescribes one of the modes of investment as "investment in immovable property". Thus, the surplus income can be applied to investment in immovable property. The charitable purposes will include the educational activities and acquiring the income yielding assets to promote the educational objects of the Society. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and the Trust still retains this property. In these circumstances, we are unable to hold that the assessee's investment can be held non-charitable in nature." (underlining added) 3. We are of the view that the Tribunal had correctly appreciated the law and has come to the conclusion that the respondent assessee was entitled under Section 11(5)(x) to invest in immovable property out of the funds which were surplus with it. The Tribunal has also concluded that there was no evidence on the part of the department that the assessee had applied the rent received from the commercial property for non-charitable purpose. That being the case, the registration under Section 12 A could not have been cancelled. We do not find any substantial questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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