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2015 (11) TMI 479 - ITAT VISAKHAPATNAM

2015 (11) TMI 479 - ITAT VISAKHAPATNAM - TMI - Registration u/s 12A denied - fee collected from the students used for carrying out the objects of the society - Held that:- There cannot be any doubt that one of the objects of the society is to impart the education and for achieving that object assessee has established an educational institution and imparting the education. Therefore, there cannot be any doubt with regard to charitable object of the society. So far as the genuineness of its activi .....

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iety and genuineness and accordingly registration u/s 12AA of the Act has to be granted. Therefore, once the conditions of section 12A of the Act are satisfied, the CIT(A) cannot deny the registration on extraneous conditions. - Decided in favour of assessee. - I.T.A.No.67/Vizag/2014 - Dated:- 30-9-2015 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri C. Subrahmanyam, AR For The Respondent : Shri Ch. Omkareswar, CIT(DR) ORDER PER V. DURGA RA .....

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stified reason for non-filing of the appeal within a time and therefore, there is a delay of 26 days. We find it is a genuine case to condone the delay. Accordingly, delay is condoned. 2. Facts are in brief that the assessee society namely Srinivasa Educational Society filed an application for registration u/s 12A of the Income-Tax Act (hereinafter called Act ) along with form no.10A on 14.6.2013 before the Commissioner of Income-Tax, Rajahmundry with the following objects:- 1. This society is o .....

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ademic and technical education to participate in rebutting the nation. 5. To give priority to the Scheduled Tribes and Scheduled Caste men and women to get well educated. 6. To conduct seminars, symposiums, worships and invited experts from India and abroad to improve the quality of education and to support the students to elevate themselves to the international standards. 7. To promote adult education schools for eradication of illiteracy to the poor people. 8. To educate people about green rev .....

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y activity is running educational institutions. It collected full fee from other students as commercial activity. The President enjoys certain extra-ordinary, prerogative & discretionary powers to give free education to the poor & needy students. PAN of the society is not valid because the society was registered under the A.P. Societies Registration Act, A.P. Act No.35 of 2001, in Society No.9 of 2004, on 6.1.2004. The society did not register itself u/s 43(1) of the A.P. Charitable and .....

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he Registrar of Societies. The society did not produce receipts for corpus donation as no such receipts were issued to the alleged donors. The society did not register itself with the Chief Commissioner of Income-Tax u/s 10(23C) of the I.T. Act even though its receipts for the financial year exceeded ₹ 1 crore. As such the genuineness of the activities has not been proved. In view of the foregoing discussion, the application in Form No.10A dated Nil filed by the society on 14.5.2013 for re .....

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arrying out the objects of the society. In so far as objections raised by the Commissioner in respect of the corpus donations, it was submitted that the promoters of the society has advanced a sum of ₹ 33,50,000/- & ₹ 21,00,000/-. As and when funds are required by the society, the promoters have donated these funds for construction of the college building. These details were considered by the A.O. relating to the assessment year 2011-12 u/s 143(3) of the Act. Therefore, it cannot .....

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a & Ors. 2. 353 ITR 32 (Del) St. Lawrence Educational Society (Regd.) Vs. CIT & Anr. 3. 327 ITR 121 (Bom) Vanita Vishram Trust Vs. CCIT & Anr. 4. 158 Taxman 146 (Del) American Hotel & Lodging Association Educational Institute Vs. Central Board of Direct Taxes & Ors. 5. 194 Taxman 442 (P&H) Kashatriya Sabha Maharana Partap Bhawan Vs. Union of India & Anr. 6. 285 ITR 327 (Kar) Sanjeevamma Hanumanthe Gowda Charitable Trust Vs. Director of Income Tax (Exemption) 7. 185 IT .....

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al Society, Machilipatnam 13. 326 ITR 310 (Mad) CIT Vs. R.M.S. Trust 5. On the other hand, the Ld. D.R. has submitted that the assessee has failed to file details in respect of the unsecured loans and therefore the Ld. Commissioner doubted the genuineness of the assessee s society to grant registration u/s 12A of the Act and submitted that the Ld. Commissioner rightly rejected registration u/s 12A of the Act. He also submitted that the assessee is not able to place any material on record to subs .....

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ied in the case of CIT Vs. Queens Educational Society & St. Pauls Sr. Secondary School 319 ITR 160 (Uttarakhand). He also relied on the order of the Tribunal in the case of Vodithala Education Society Vs. ADIT (Exemptions) II, Hyderabad (2008) 20 SOT 353. 6. We have heard both the sides, perused the records, gone through the orders of the authorities below. The assessee i.e. Srinivasa Educational Society existed for the purpose of imparting education in the year 2004 and get registration und .....

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a commercial activity. The President of the society enjoys extra ordinary power prerogative and discretionary power to give free education to the poor and needy students. The assessee society failed to produce confirmation letters in respect of unsecured loans taken. The society also failed to register itself with the CCIT u/s 10(23C) of the Act. It is a fact that the assessee society existed for the purpose of imparting the education and running various educational institutions since 2004. The .....

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ollecting the fee from the students. Therefore, collecting fee from the students not amounting to commercial activity. 7.2 Another objection raised by the Commissioner in respect of unsecured loans is concerned, it was submitted by the Ld. Counsel for the assessee that the promoters of the society have advanced funds of ₹ 33.50 lakhs and ₹ 21 lakhs as and when funds are required by the society. The promoters have donated these funds for construction of the college building and these .....

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that relevant assessment year once the assessing officer has considered the funds donated by the promoters of the society and assessment was completed u/s 143(3) of the Act, in our opinion it is not a subject matter for the Commissioner to call those details and rejecting claim of the assessee u/s 12A of the Act. We further observed that when the assessee filed an application for registration u/s 12A of the Act, the Commissioner at this time of granting registration u/s 12A of the Act, he has to .....

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the society did not register with the Chief Commissioner of Income-Tax u/s 10(23C) is concerned, it is not mandatory for the assessee before claiming exemption u/s 12A of the Act that the assessee should register with Chief Commissioner of Income-Tax u/s 10(23) of the Act. In view of the above, we find that Commissioner without considering the objects of the assessee society and simply rejected registration u/s 12A of the Act on flimsy grounds. So far as amendments made by the assessee in respe .....

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cted. 7.3 One of the another argument raised by the Ld. D.R. that assessee is only providing free education to 3 students. In this context, we observe that the assessee society committed for the education and running the educational institution as per the objects of society and also provided free education to 3 students. Therefore, the assessee is carrying its activities as per the objects of the society imparting the education, which is charitable in nature and in our opinion, the assessee is e .....

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al institutions and to impart the education. So far as genuineness is concerned, assessee only running the educational institutions. Therefore, the genuineness cannot be doubted. It is necessary to clarify that the genuineness in respect of the activities carried by the assessee has to be looked into at the time of granting registration u/s 12A of the Act. In the present case the Commissioner has gone beyond the scope of the Act and rejected the claim of the society on the ground that unsecured .....

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d the view that an educational institution can avail exemption either u/s 10(23C) or 11 of the Act if the conditions imposed under those provisions are satisfied. Moreover, the time of granting registration u/s 12AA of the Act, the CIT(A) has to look into the objects of the society and genuineness of the activities. As can be seen, there cannot be any doubt that one of the objects of the society is to impart the education and for achieving that object assessee has established an educational inst .....

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y the Act that the assessee society has to make an application immediately when the society is constituted. The Commissioner has to examine the objects of the society and genuineness and accordingly registration u/s 12AA of the Act has to be granted. Therefore, once the conditions of section 12A of the Act are satisfied, the CIT(A) cannot deny the registration on extraneous conditions. 9. In the case of Commissioner of Income Tax Vs. RMS Trust 326 ITR 310, the Hon ble Madras High Court has obser .....

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