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The Commissioner of Income Tax, Alwar Versus M/s. Model Public School, Society, Bhiwadi

2016 (12) TMI 357 - RAJASTHAN HIGH COURT

Registration granted to the society u/s 12A(a) cancelled - whether Tribunal is justified in holding that the object and purpose of assessee Samiti are charitable falling u/s.2 (15) and further directing the CIT to allow registration u/s.12A ?- Held that:- On perusal of the material on record, we find that the assessee has utilized the surplus funds in acquiring the capital/fixed assets for the school and for making the fixed deposits in the bank and income arising from the said fixed deposits ha .....

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ning its activity for the purposes for which it was registered. The objections raised are without any basis and material on record and therefore, the registration cancelled by him is not justified - Decided in favour of assessee - DB Income Tax Appeal No. 613/2008 - Dated:- 22-11-2016 - K. S. Jhaveri And Mahendra Maheshwari, JJ. Ms. Parinitoo Jain, for the appellant Mr. Anant Kasliwal, for the respondent ORDER 1. By way of this appeal, the department has challenged the judgment and order of the .....

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ess of actual expenditure. 2.2. The fees are being charged by the institution in commercialized manner with a motto of earning profits. 2.3. According to object, the society was to undertake help to poor children by way of free education and also providing hostel facilities to them. But no such help/assistance is being provided to poor children. 2.4. The institution is generating surplus amount year after year as reflected in the books of account. 3. In view of the above, the institution is not .....

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r the five heads i.e. boarding and lodging, computer fees, laboratory fees, news letter fees and vehicle fees, had the surplus being receipts more than the expenditure. The second reason for which the ld. CIT was not satisfied that as per the objects of the society, the society was required to provide the books and educational material free and financial aid to the poor students and the hostel and medical aid to the poor students and the society has not been able to prove whether such facilities .....

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ances of the case and in law, the order of the Tribunal is perverse in reversing the order of CIT passed u/s.12AA(3) of the Income Tax Act? (ii) Whether under the facts and in the circumstances of the case, the ld. Tribunal is justified in holding that the object and purpose of assessee Samiti are charitable falling u/s.2 (15) of the IT Act and further directing the CIT to allow registration u/s.12A of the Income Tax Act? 5. Counsel for the appellant contended that the assessee has not fulfilled .....

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ion u/s 12A(a) of the I.T. Act, 1961 by the ld. CIT, Jaipur, vide order dated 19-07-1988 (PB 11). The ld. CIT in his order at page 1 has pointed out that the institution is collecting the fees in excess of actual expenditure and the fees is being charged in a commercial manner with a motto of earning profits and the institution therefore, is generating surplus year after year. The ld. AR Shri Kranti Mehta, Chartered Accountant has pointed out at PB 1 to 9 that the society had the objects to prov .....

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poor. The ld. AR further pointed out that the assessee submitted an application with Central Board of Direct Taxes in Form 56-d on 3.12.99 for taking exemption under the newly inserted Provision u/s 10(23)(c)(vi) of the Act which was granted the exemption vide the order of the CBDT dated 23.03.2007 for the assessment year 1999-2000 and onwards (PB 39). Now the question arises whether the assessee has achieved the objects for which the society has been registered under the Registrar of Societies .....

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ation with Department, whether there is any motive for earning profit, whether any business has been carried on by the assessee society, whether the society has misutilised or mismanaged the funds for the purpose of business or for the benefit of any of the trustee or any of the member of the society. There is no findings of the ld. CIT in this regard and no material has been brought on record in this regard. As regards the charging of the fees under different heads, the ld. AR pointed out that .....

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ard of Secondary Education and there is no objection from the said Board regarding the charging of fees under any heads of the fees and in the absence of any material on record, the ld. CIT is not justified in coming to the conclusion that the assessee society is having the surplus and therefore, it is not carrying out its activities accordingly to its objects. As regards the expenditure, the ld. AR has pointed out that the diagrammatic presentation of fixed assets and number of students, income .....

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The surplus as reflected in the F.Y.1998-99 at ₹ 20.95 lacs remained at minus ₹ 15.63 lacs in the F.Y.2005-06. The position of the surplus as per PB 16 is as under:- Financial Year Surplus (Rs. In Lacs) 1998-99 20,95,403 1999-00 42,74,458 2001-02 2,98,919 2002-03 56,44,653 2003-04 38,73,448 2004-05 56,67,687 2005-06 -37,72,221 2006-07 -15,63,572 The capital expenditure as per fixed assets schedule of the society and that of school for different years (PB 16-37) is as under:- Financi .....

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