TMI Blog2014 (5) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... ot demonstrated any nexus between the purchase of land and objects - For a society running schools, the building construction become integral part of the activity for which purchase of land becomes an essential feature - Thus, the adverse inference on nexus is misconceived in any case the issues about surplus or claiming depreciation become issues relevant for the assessment proceedings and have no bearing at the time of initial registration u/s 12A - Relying upon Shri Gian Ganga Vocational & Educational Society Versus Commissioner of Income-tax, Rohtak [2013 (11) TMI 165 - ITAT DELHI] - the assessee society is eligible for registration u/s 12AA which should be granted – Decided in favour of Assessee. - ITA No. 2285/Del/2012 - - - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments. Ld. CIT called for a remand report from the Addl. CIT Rohtak, who did not recommend registration on irrelevant following issues: (1) The trust failed to file original memorandum of its establishment and only submitted a photo copy. (2) The Addl. CIT had reported that the surplus of the society is at very higher side and also violate the provisions of sec. 11 of the I.T. Act, 1961. (3) The society was registered on 17-5-2004 whereas the application u/s 12A was made after a span of 7 years. (4) The P L A/c for the last three years i.e. F.Y. 2008-09, 2009-10 2010-11 revealed that the trust has shown its income over expenditure at Rs. 54,31,248/-, Rs. 71,20,986/- Rs. 52,86,769/- respectively which are more than 15% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts provided by them, as this would be mere ostensible charity. If the charitable institutions are earning profits, they are misusing the benefits given by these provisions. If an institution fulfilling charitable purpose undertakes activities for profit, it hoodwinks the statute. (Indian Chamber of Commerce 101 ITR 796). Keeping in vie the aforesaid facts and circumstances, it is clear that the applicant failed to substantiate his claim that trust s aims/ objects and terms of memorandum are of the charitable nature and also could not produce any concrete evidence to prove the genuineness of the activities of the trust in spite of repeated opportunities accorded. Moreover, contents of dissolution clause in its trust deed discussed supra a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en found. Therefore, from the observations of Addl. CIT and CIT itself it emerges that assessee s objects are for imparting education, books of a/cs are properly maintained and audited. (v) Merely because the society has applied for registration u/s 12A after 7 years cannot be a ground for rejection of the registration, in as much as the registration will be applicable from prospective date and not from the retrospective effect. 3.1. Reliance is placed by assessee on ITAT Chandigarh Bench order dated 13-8-2010 in the case of Spring Dale Educational Society, Ludhiana Vs. CIT (ITA no. 975/Chd/2009), holding as under: In conclusion, we hold that the applicant demonstrated before the Commissioner that it was imparting education and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether its activities are genuine any further. The jurisdiction and competence to examine an issue under the RTE Act obviously lies with the authorities mentioned therein. The, the CBDT Circular no. 11 of 2008 (supra) clearly states, inter alia, that the provision to Section 2(15) does not apply in the case of education and where the purpose of a Trust or institution is education, it will constitute charitable purpose even if it incidentally involves in carrying on of commercial activities. .. . 15. In view of the above, the order passed by the ld. CIT is hereby cancelled. We direct the ld. CIT to grant registration to the society on verifying the original document of establishment of the assessee Trust, which has been shown t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as much as the surplus has been kept by the assessee either in FDRs or investment in purchase of land. We find no merit in the observation that the assessee has not demonstrated any nexus between the purchase of land and objects. For a society running schools, the building construction become integral part of the activity for which purchase of land becomes an essential feature. Thus, the adverse inference on nexus is misconceived In any case the issues about surplus or claiming depreciation become issues relevant for the assessment proceedings and have no bearing at the time of initial registration u/s 12A. Our view is supported by above ITAT orders including ITAT Delhi Bench order in the case of Shri Gian Ganga Vocational Educational ..... X X X X Extracts X X X X X X X X Extracts X X X X
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