TMI Blog2015 (5) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... T DR ORDER PER T.S. KAPOOR, AM: This is an appeal filed by assessee against the refusal for granting registration u/s 12A(1)(aa) of the I. T. Act, 1961. The assessee has taken six grounds of appeal however the crux of grievance of assessee is the refusal of CIT for granting registration u/s 12A(1)(aa). 2. The brief facts of the case are that the assessee is a society registered under the Societies Registration Act and the society was registered vide certificate dated 24.08.2000. The aims and objects as noted in the amended constitution of the society we..f. 15.06.2010 as placed in paper book page 3 onwards, is to run schools beside other allied objects. Ld. A.R. at the outset submitted that application for registration u/s 12A(1)(aa) was duly filed in form 10A along with audited accounts for the past 3 years. However, Ld. CIT has refused to grant registration on the basis that objects were not charitable in nature and further holding that the assessee was charging hefty fees and therefore, was not making any charity and instead was earning huge profits. In this respect, Ld. A.R. took us to a copy of audited accounts for the years ended 2010-11 to 2012-13 placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Uttarakhand in the case of National Institute of Aeronautical Engineering Educational Society reported in 181 Taxman 205 (Uttaranchal) and submitted that the facts in the above noted case as decided by Hon'ble High Court are peri-materia with the facts in the present case and therefore, following the above said decision of Hon'ble High Court, appeal filed by assessee needs to be dismissed. 4. Ld. A.R. immediately interrupted and invited our attention to the judgement of Hon'ble Supreme Court in the case of Queens Educational Society 275 CTR 449placed at pages 4-15 of the paper book and submitted that the findings of Hon'ble High Court in the case law as relied upon by Ld. D.R. has been reversed by Hon'ble Supreme Court in this case. Ld. D.R. interrupted and argued that the said judgement of Hon'ble Supreme Court is with respect to exemption u/s 10(23C)(iiiad) of I. T. Act, 1961 whereas the present case is with respect to registration u/s 12AA which deals with exemption u/s 11 and therefore submitted that the case law cited by Ld. A.R. is not comparable. Ld. A.R. submitted that u/s 10(23C)(iiiad) the exemption is allowed to institutions where the turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA. The findings of Hon'ble Supreme Court as contained in para 19 are reproduced below: It is clear, therefore, that the Uttarakhand High Court has erred by quoting a non-existent passage from an applicable judgment, namely, Aditanar and quoting a portion of a property tax judgment which expressly stated at rulings arising out of the Income Tax Act would not be applicable. Quite apart from this, it also went on to further quote from a portion of the said property tax judgment which was rendered in the context of whether an educational society is supported wholly or in part by voluntary contributions, something which is completely foreign to Section 10(23C) (iiiad). The final conclusion that if a surplus is made by an educational society and ploughed back to construct its own premises would fall foul of section 10(23C) is to ignore the language of the Sec 'on and to ignore the tests laid down in the Surat Art Silk Cloth case, Aditanar case and the American Hotel and Lodging case. It is clear that when a surplus is ploughed back for educational purposes, the educational institution exists solely for educational purposes and not for purposes of profit. In fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity by any definition. 3. The society preferred an appeal before the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as the Tribunal ) which has allowed the appeal of the society and has set aside the order passed by the CIT and directed that registration applied for by the appellant under Section 12AA of the Act be granted. The present appeal is directed against the said order and the following questions of law have been formulated by the revenue:- 1. Whether, in the facts and circumstances of the case, the Id. ITA T was right in law to restrict the powers of the CIT for making the enquiries u/s 12AA(a) of the Act despite the fact that the said section provides that the CIT can make such enquiries as he may deem necessary in this behalf. 2. Whether, in the facts and circumstances of the case the Id. ITA T was right in law in granting registration to the assessee Trust when no work of relief to the poor in the field of education was done as per definition of Charitable Purposes provided u/s 2(15) of the Act. 4. The Tribunal while allowing the appeal has noticed at Memorandum of Association and the objects of the society was to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rules and the factum of the establishment and running of schools is not disputed the same was a genuine activity and the enquiry regarding genuineness of the activities cannot be stretched beyond this. 7. In view of above facts and circumstances, it would be clear that respondent-society which was admittedly running a Polytechnic 90llege and the activities were interwoven for furthering the projects and activities pertaining to education, the Tribunal rightly directed that registration should be granted to the respondent- society with the rider that the same could always be cancelled if it came to the notice of the CIT that the society was not carrying on the activities as per its objects. The Commissioner while processing the application under Section' 12AA of the Act was not to act as an Assessing Authority and thus, the Tribunal has rightly allowed the appeal filed by the society In the facts and circumstances of the present case. Accordingly, no substantial question of law as contended in the present appeal arises for determination by this Court and the order dated 31.3.2010 passed by the Tribunal is upheld. Consequently, the appeal is dismissed. 8. Similarly ..... 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