TMI Blog2017 (1) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10(23C)(iiiab) of the Act. Again we find that this has no reflection on the genuineness of the activities carried out by the applicant society, but is an affirmation of the genuineness of the activities since it calls into question the claim of exemption under section 10(23C)(iiiad) of the Act, which grants exemption from tax of incomes of institutions existing solely for the purpose of education and whose receipts during a financial year do not exceed a specified limit, on account of the income exceeding a particular limit but does not doubt the genuineness of the activities carried out by the assessee. Further the observation of the Ld.CIT that the institutions of the applicant society are being run on commercial lines ,we find has no basis. Ld.CIT has merely made a general comment on the above lines which is not supported by any facts or figures and hence in our view requires no consideration. Since the genuineness of both the object and activities of the assessee society having not been doubted, we are of the considered opinion that the order of the Ld.CIT cannot be sustained. Consequently we set aside the order passed by the CIT and direct that registration applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration under section 12A of the Act in Form No.10A on 14.7.2015. Accordingly, notice of hearing was issued to the appellant during the course of which details were filed. The learned Commissioner of Income Tax after perusing the details filed, found that the by-laws of the appellant society, which was formed in 1981, had remained unchanged but an additional school under the name of S.M.S. Public School had started running under the aegis of the society. The learned Commissioner of Income Tax further noted that while the appellant society had been showing income from donation and rent only, the two schools had been showing income from fees, rent etc. He further noted that the college was substantially financed by the Government, as 95% of salary was reimbursed by the Haryana Government and balance 5% paid by the management. Taking into consideration this fact, the learned Commissioner of Income Tax held that the appellant society was liable to file return under section 10(23C)(iiiab) of the Act, but had not done so. He further noted the receipts of the appellant society and the school and college run by it for three financial years i.e. financial years 2012-13, 2013-14, 2014-15 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner for the purpose of grant of registration. Further the Ld. counsel for the appellant stated that even on merits of the issue regarding claim of exemption under section 10(23C)(iiiad) of the Act to be taken on aggregate basis, there were a number of decisions of the High Courts and Tribunals which stated that limit of ₹ 1 crore had to be taken institution-wise and not on aggregate basis. The Ld. counsel for the appellant, therefore, stated that in any case the denial of registration to the applicant society was wrong and the same needed to be restored. 5. The Ld. DR, on the other hand, relied upon the order of the learned Commissioner of Income Tax. 6. We have heard the contentions of both the parties, perused the orders of the authorities below and gone through the documents placed before us. We hold that the learned Commissioner of Income Tax in the present facts and circumstances of the case has erred in denying registration under section 12AA of the Act to the appellant society. The registration to be granted being governed by the provisions of section 12AA of the Act, it is settled law that the scope of powers of the Commissioner is limited to being satisfie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related to charitable purposes, the CIT is again empowered to make enquiries as he thinks fit. In case the activities are not genuine and they are not being carried out in accordance with the objects of the trust/society or the institution, of course, the registration can again be refused. But on mere presumptions and on surmises that income derived by the trust or the institution is being misused or that there is some apprehension that the same would not be used in the proper manner and for the purposes relating to any charitable purpose, rejection cannot be made. 21. Sec. 12AA, which lays down the procedure for registration, does not speak anywhere that the CIT, while considering the application for registration, shall also see that the income derived by the trust or the institution is either not being spent for charitable purpose or such institution is earning profit. The language used in the section only requires that activities of the trust or the institution must be genuine, which accordingly would mean, they are in consonance with the objects of the trust/ institution, and are not mere camouflage but are real, pure and sincere, nor against the proposed objects. The prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation. Admittedly, all books of account of the society, school and college for the financial years 2012-13 to 2014-15 were filed before the learned Commissioner of Income Tax, copy of registration of the society, the constitution/by-laws, the letter of registration all were filed before the learned Commissioner of Income Tax , who after perusing the same has not found anything adverse regarding the activities being carried on by the assessee society. Thus, clearly, the genuineness of the activities of the applicant society has not been doubted by the learned Commissioner of Income Tax .Even before us the Certificate of Registration of Societies was filed showing that the applicant society was registered on 12th November 1981.Copy of Constitution of the society was filed to prove that it was formed primarily for the purpose of imparting education and thus had a charitable object. Further copy of the Balance Sheet and Profit and Loss Account for the year ended on 31-03-2015 was filed showing receipts of the College and School run by the applicant society primarily from fees, thus proving the genuineness of the activities carried out by it. 8. What the learned Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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