TMI Blog2015 (7) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ny was granted registration u/s 12A of the Act, based on MOA approved by the Registrar of Companies and any change in the objects of the MOA as per the Companies Act became operative from the date of such approval given by the concerned authorities for Corporate Affairs and approval is given prospectively and therefore it is only when modified objects are intimated and approved by the DIT (E) that these modified objects can be implemented and the works can be undertaken in pursuance of the objects. Hence the AO was of the view that the expenditure which was not in accordance with the object mentioned in the MOA is to be disallowed. Since we have remitted the issue with respect to the application of income u/s 11 in order to give an opportunity to the assessee to produce the necessary details before the AO, the AO shall also examine the issue with respect to the change in the objects of MOA as per the Companies Act and the date of approval by the DIT (E) of the modified objects as this fact is relevant for the implementation in pursuance of the objects and also in deciding whether expenditure is allowable when it is not in accordance with the objects mentioned in the MOA as on that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of its objects showed that it was aware of the limitations of its objects in the context of the activities being carried out by it. The Assessing Officer also noted that the registration uls 12A had been granted based on the MOA approved by the Registrar of Companies, that any changes in the objects in the MOA became operative from the date of such approval by the authorities concerned, and it was only when the modified objects were intimated and approved by the DIT (Exemptions) and that these modified objects can be implemented or works undertaken in pursuance of such modified objects for availing exemption u/s 11. The Assessing Officer also observed that the assessee had not submitted the details or evidence for expenditure on activities undertaken in places affected by natural calamities and since the expenditure was not in accordance with the objects mentioned in the MOA, these expenses were not allowable as application of income u/s 11. 6. In the course of the appellate proceedings, the AR suhmitted that the interpretation of the objects made by the Assessing Officer was erroneous, that the assessee was permitted to undertake any kind of charitable activity for relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 till 1997-98, the Revenue must follow a consistent pattern and when the Department has granted the benefit of section 10(22)A and 11 of the Act earlier, it cannot be permitted to change its opinion without any change in the circumstances. The ld Counsel relied on the order of the CIT (A). 11. We heard both the parties. The AO during the scrutiny proceedings thoroughly examined the objects of the assessee company. The AO held that on examining the application of income vis- -vis the objects of the company, it was observed that the assessee company has not applied its income as per the objects as enumerated at Para 3 in the AO s order, which is as follows: 1. To establish and run in any part of India colleges or schools where general, scientific, commercial, engineering be imparted to the students orally or through post for advancement and propagation of education and learning. 2. Establishment, maintenance and support of libraries,' museums and reading rooms and distribution of books etc., for advancement of education and knowledge in general and for this purpose hold, arrange and organize meetings, lectures, talks, discussions, seminars, symposia, conferences, compet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany had applied to the concerned authority to modify and add additional objects in the month of May, 2009 which was ultimately rejected in January, 2011. It was the conclusion of the AO that the assessee was not confident of the activities in relation to the objects existing and therefore had made efforts for addition of new objects. Further the AO in the course of assessment proceedings vide order sheet entry dated 08-012014, the Authorised Representative of the assessee was asked to submit the details of the places, where the activities are conducted, affected by natural calamities as per the objects. The case was adjourned to 17-01-2014. However, the AR has appeared on 21-01-2014 and filed note on medical camps and rehabilitation consequent to floods but no proof has been furnished to that effect. The case was adjourned to 27-01-2014 asking the assessee to produce bills vouchers and books of account. However, on the said date there was no compliance and on 06-03-2014 the AR appeared and filed reply to show cause letter discussed above and amended objects as approved by ROC. From the delay of 40 days, caused by the AR, it was inferred that as there is no other option/ reply t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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