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2016 (2) TMI 395 - ITAT VISAKHAPATNAM

2016 (2) TMI 395 - ITAT VISAKHAPATNAM - TMI - Registration u/s 12AA denied - Held that:- At the time of granting registration, the Commissioner has to see that whether the assessee is established for the charitable purpose or not and whether the funds collected are being utilized for that purpose. Once the assessee has satisfied the conditions that it is existed for the purpose of charitable nature and the funds received also are being utilized to achieve the objects of the trust, the Commission .....

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f the judgement of Hon’ble Karnataka High Court, we are of the opinion that assessee deserve to be granted registration u/s 12AA of the Act. Thus, we quash the order passed by the Ld. Commissioner and grant registration u/s 12AA of the Act to the assessee - Decided in favour of assessee - I.T.A.No.404/Vizag/2012 - Dated:- 8-1-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri Th. Lucas Peter, DR O .....

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pear before him on 29.5.2012 and accordingly the assessee s representative appeared and filed a detailed note on transactions with HUF, produced books of accounts for the financial year 2010-11 and detailed submissions made in respect of utilization of the funds. 4. The Ld. Commissioner after considering the detailed submissions made by the assessee, he has observed that the Chief Commissioner of Income Tax, Visakhapatnam vide order in F.No.CC/VSP/Tech/10(23C)/ 1/11-12 dated 29.2.2012 rejected t .....

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e further observed that the assessee has not registered u/s 43(1) of the Andhra Pradesh Charitable and Hindu Religious Institution and Endowments Act, 1987. On the above observation he came to a conclusion that assessee has continued its violations and though the amended objects are charitable in nature, the activities of society are not genuine and rejected the registration u/s 12AA of the Act. 5. On being aggrieved assessee is in appeal before the Tribunal. 6. The Ld. Counsel for the assessee .....

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ure or not and whether society is carrying such activities in accordance with the objects or not and registration u/s 12AA of the Act has to be granted. For that he relied on the decision of Hon ble Karnataka High Court in the case of Sanjeevamma Hanumanthe Gowda Charitable Trust Vs. DIT 285 ITR 327 and submitted that the assessee trust existed only for charitable purpose and hence registration u/s 12AA has to be granted. 7. On the other hand, the Ld. D.R. has strongly supported the order passed .....

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ee on the ground that the Chief Commissioner by order dated 20.5.2011 rejected the approval u/s 10(23C)(vi) of the Act on the ground that the assessee society has given interest free advances to the HUF who are the sons of Sri Sama Suryanarayana Murthy (whose name trust is created) and also on the ground that some of the relatives and family members are drawing ₹ 6,900/- p.m. from the society. We find that the assessee society is existed only for imparting education and the same is accepte .....

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he registration u/s 12AA of the Act. We find that the Commissioner without examining the explanation of the assessee and simply relied on the order passed by the Chief Commissioner, rejected registration u/s 12AA of the Act is not justified, particularly when the assessee is carrying on the educational activities. So far as payment made by the society, to some of the relatives/members of the HUF is concerned, it was clearly explained before the Addl. Commissioner of Income Tax, Kakinada dated 14 .....

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ts Act, 1987. The Tribunal has already considered this aspect and held that in the case of Sri Saraswati Educational Society, Amalapuram Vs. CIT Rajahmundry in ITA No.202/Vizag/2012 for registration u/s 12AA of the Act, it is not mandatory for registration u/s 43 of the A.P. Charitable & Hindu Religious Institutions and Endowments Act, 1987. Therefore we find that rejecting the registration on the ground of non-registration with the A.P. Charitable and Hindu Religious Institutions and Endowm .....

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act that a trustee is life member, may be a relevant but cannot by itself lead to a finding that the Trust is not charitable. 9. The Hon ble Karnataka High Court in the case of Sanjeevamma Hanumanthe Gowda Charitable Trust (supra) has held that for the purpose of registration u/s 12AA of the Act, what the authorities have to satisfy is the genuineness of the activities of the trust or institution, how the income derived from the trust property is applied to charitable or religious purpose and no .....

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