TMI Blog2013 (7) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... primary purpose and the predominant object are to promote the welfare of the general public the purpose would be a charitable purpose - Following decision of CIT vs. Gujarat Maritime Board [2007 (12) TMI 7 - SUPREME COURT OF INDIA] and Ajai Hasia vs. Khalid Mujib [1980 (11) TMI 150 - SUPREME COURT] - Decided against Revenue. - Income Tax Appeal No.-171 of 2009 - - - Dated:- 19-7-2013 - Hon'ble Sibghat Ullah Khan And Hon'ble Dr. Satish Chandra,JJ. For the Appellant : D. D. Chopra For the Respondent : S. K. Garg, Amit Shukla ORDER (Delivered by Hon'ble Dr. Satish Chandra, J.) This is an appeal filed by the Department under Section 260A of the Income-Tax Act, 1961 against the judgment and order dated 31.07.2009 passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India) while auditing the accounts of the society has specifically commented that the assessee has failed to attain their objectives. It was stated that the expenses were not incurred for the purpose of objects mentioned in the Article of Association. So, the funds were not utilized properly. Learned counsel further submits that the registration under Section 12A of the Act cannot be claimed as a matter of right. It is also a submission of the learned counsel for the appellant that the funds were kept only in the Bank to meet the office expenses. The assessee also did not give any reply to the query raised by the CIT during the course of hearing for the mis-utilization of fund or not properly utilization of the funds. For this purpose, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. Thus, the objectives of the society are related to the public utility. The CIT has wrongly rejected the assessee's application without considering the main object of the society i.e. public utility. The CIT in the IInd round, has also not followed the direction of the Tribunal and rejected the application of the assessee in an arbitrary manner. For this purpose, he has relied on the ratio laid down in the following cases:- (a) Ravi Iron Industries vs. Director of Investigation and others; (2003) 264 ITR 28; (b) Ajay Hasia vs. Khalid Mujib Sehravardi; (1981) 1 SCC 722; (c) CIT vs. Gujarat Maritime Board; (2007) 295 ITR 561 (SC) (d) CIT vs. Lucknow Industrial Development Authority, Lucknow, ITA No. 156 of 2008; (e) CIT vs. Krish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and ideally kept in the Bank. But, it is not the case of the Department that funds were stiffed or misappropriated. For not utilization of the fund and keeping in the Bank, never attracts the cancellation of the registration of the society, however, it may amounts non functioning of the Society. Needless to mention that the expression "any other object of general public utility" in Section 2(15) of the Income-tax Act, 1961, is of the widest connotation. That expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would cease to be charitable even if pubic welfare is intended to be served. If the primary purpose and the predominant object are to promote the welfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it reads as under:- "Section 12AA(3)-Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or has obtained registration at any time under Section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]] and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard." I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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