TMI Blog2016 (8) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal objects indicate the intention of the assessee to pursue its activities outside India. This objection of the Commissioner for denial of registration is also without any force. We notice from the relevant incidental clause relied upon by the Revenue that such clause primarily enables the assessee to raise funds to attain the main objects of the company. It does not give any impression that the assessee shall carry out its activities outside India. We set aside the impugned order of the Commissioner of Income-tax (Exemption) and restore the matter back to his file with a direction to reconsider the applications of the assessee for registration under S.12AA and approval under S.80G afresh in accordance with law and after giving reasonable opportunity of hearing to the assessee. - ITA No.1353/Hyd/2015 - - - Dated:- 24-6-2016 - SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER For The Appellant : Shri Ajay Gandhi For The Respondent : Shri J.Siri Kumar ORDER Per Pradip Kumar Kedia, Accountant Member : This appeal is filed against the order of the Commissioner of Income-tax (Exemption), Hyderabad dated 22.9.2015, refusing r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be paid or distributed among the members of the company but shall be given or transferred or transferred to some other institution or institutions having objects. similar to the objects of the company to be determined by the members of the company to be determined by the members of the company at or before the time of dissolution and in default thereof by the High Court of Judicature that has or may acquire jurisdiction in the matter 2.1 A perusal of the said clause indicates that there is no intention on the part of the society to transfer the assets to another society, which is also having registration u/s.12AA of the I.T. Act. 3. Further, as seen from the objectives incidental or ancillary to the attainment of the main objects of MoA, the objective clause (6) is mentioned as under: 6. To assist any viable enterprise or ventures of self help groups with in India and abroad to raise funds to attain main objects of the company. 3.1 A perusal of above clause indicates that the intention of the company to operate its activities outside India, which is in violation of provisions of section 11(1)(a) of the Act. 4. Under these circumstances, the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to any other similar institution having registration under S.12AA of the Act. We find no rationale in this objection of the Commissioner. Relevant dissolution clause clearly specifies that surplus arising on dissolution, after satisfaction of its debts and liabilities shall be transferred to other institutions pursuing objects similar to the those of the assessee company. We fail to comprehend any infirmity in such clause. We also find that identical dissolution clause came up for consideration before the Rajkot Bench of this Tribunal in Smt.Sulochanadevi Educational Foundation V/s. CIT Jamnagar (2013) 40 taxmann.com.466(Rajkot-Trib)., wherein the Tribunal held after due consideration that the Revenue has clearly erred in refusing to grant registration sought by the assessee under S.12AA of the Act taking shelter of such objection. Relevant observations of the Tribunal in this case are as follows- 9. Having heard both the sides, I have carefully gone through the orders of the authorities below. In clause X of Memorandum of Association on page 5 and clause 52 of Articles of Association on page 10, it is clearly mentioned the conditions of windingup/ dissolution, which is rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o will verify the object clause and if upon verification he found that the object clause contained in the aforesaid winding up or dissolution clause, in that event he will grant the registration to the assessee-trust u/s 12AA of the Income-tax Act, 1961. The assessee is an Educational and Charitable Trust and issuance of registration u/s 12AA is a primary condition for the start of the charitable activity of the trust, therefore its case has to be decided on priority basis. I, therefore, direct the assessee-trust to suo motu appear before the ld Commissioner of Incometax, Jamnagar within 15 days on receipt of this order of the Tribunal without waiting for any notice from the Revenue Department and submit the original Memorandum and Articles of Association of the Institution to the ld Commissioner of Income-tax, Jamnagar. Then after the ld Commissioner of Income-tax, Jamnagar shall pass an appropriate order as per law as deemed fit within a reasonable time. With these directions, assessee s appeal is treated as allowed for statistical purposes. 8. The second objection of the CIT(Exemption) is based on the reading and interpretation of the incidental objects as provided for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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