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2016 (2) TMI 1090 - ITAT AGRA

2016 (2) TMI 1090 - ITAT AGRA - Tmi - Refusing the registration to the appellant society u/s 12AA - Held that:- One of the main object of the assessee society was carrying educational activities which is clearly a charitable activity as defined u/s 2(15). Further in pursuance of its main object the assessee was conducting the activity of imparting education in the two institutes established by it being Royal College of Education & Research Centre & Pearl Valley School. We find that these documen .....

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der section 12AA. The ACIT had very clearly stated that the assessee society fulfilled all the conditions required for registration under section 12AA. - Further the inspector deputed to conduct enquiry about the activity being carried out by the assessee society also clearly stated that the activity were in the nature of imparting education. Thus we hold that the assessee society is entitled to Registration u/s 12AA - Decided in favour of assessee. - ITA No.129/Ag/2013 - Dated:- 9-2-2016 - .....

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& on facts in refusing the registration to the appellant society u/s 12AA of the Income Tax Act, 1961. 3. Brief facts relating to the case are that the asseessee society filed an application in Form No. 10A seeking registration under section 12AA of the Act on 09/08/2012. During the proceedings conducted under section 12AA, a report was called from the AO to verify the genuineness of the activities of the society. The same was forwarded to the Ld. CIT, who on going through the report and the .....

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Written submissions were filed by the assessee society, after considering which, the Ld. CIT held that the genuineness of the charitable activity carried out by the society had not been established in the absence of production of books of account, bills, vouchers and supporting relevant documentary evidences and also the genuineness of the corpus donation of ₹ 7.21 lacs and therefore registration under section 12AA was refused to be granted to the assessee society. 4. Aggrieved by the same .....

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ssessee society to the ACIT Gwalior who was carrying out the proceedings under section 12AA, dt. 03/09/2012, 20/12/2012 & 18/02/2013, wherein it was mentioned that books of accounts were being produced before the ACIT. Ld. AR further submitted that as far as the issue of corpus donation was concerned, detailed submissions had been filed to the ACIT vide the above mentioned letters. Ld. AR submitted that the detail of corpus donation was filed alongwith letter dt. 03/09/2012 placed at Paper B .....

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Ld. AR submitted that having filed all the necessary details and evidences with regard to the corpus donation and no adverse observation regarding the same having been made either by the ACIT or CIT, registration under section 12AA could not have been refused for the reason that genuineness of the corpus donation was not proved by the assessee. Ld. AR further submitted that there was no finding by the Ld. CIT to the effect that the objects of the society were not charitable as defined under Sec .....

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yal College of Education & Research Centre, Gwalior, under the approval and norms of NCTE, New Delhi from the year 2008 and had also started one pre primary school in the name of Pearls Valley School from the year 2010. Ld. AR submitted that audited Receipt and Payment account , Income & Expenditure account and Balance Sheets of the assessee society and the above two educational institutes being run by it, were submitted before the ACIT / CIT which clearly proved that the assessee was ge .....

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ut by the assessee society, addressed to the Ld. CIT recommending the grant of registration to the assessee society u/s 12AA. Ld. AR further drew our attention to the Inspectors enquiry report attached with the aforementioned letter to the Ld.CIT, which was a report of the Inspector who had visited the premises of the assessee society and commented on the activity of the assessee society and stated that the assessee is engaged in imparting education at higher level by running course of B.Ed/D.Ed .....

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assessee was eligible for grant of registration under section 12AA and therefore the decision of refusal by the Ld. CIT had no basis at all. 7. Ld. DR on the other hand relied upon the order of the Ld. CIT and referred to a letter written by the JCIT, Range-2, Gwalior to the CIT, stating that the genuineness of the donation received were not beyond doubt. 8. We have heard the rival submission and perused the orders of the authorities below as also the documents placed before us. 9. The only iss .....

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trust had not been established. One of the reason forwarded by the Ld. CIT for holding so, is that books of account, bills, vouchers and supporting relevant documentary evidence were not filed by the assessee society. On a perusal of the documents filed, we find that books of account were produced twice before the ACIT conducting the enquiry and once before the Ld. CIT. The books of account were first produced before the ACIT on 03/09/2012 and then on 20/12/2012 which is evident from the letter .....

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ion, since the assessee society could not establish the genuineness of the corpus donation received by it amounting to ₹ 7.21 Lacs. 11. As far as this issue is concerned, we find that the same cannot be a consideration before granting / refusing registration u/s 12AA. The scope of enquiry of the Commissioner as stated above, is limited to looking into only the genuineness of the objects and activities of the Trust / Institution. Genuineness of the activities means they are in consonance wi .....

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titution and also about the objects of the trust or the institution. On being satisfied about the genuineness of the activities of the trust or the institution and also about its objects, the CIT would either grant the certificate or would reject the prayer. In order to satisfy himself about the genuineness of the activities of the trust or the institution, he can call for such documents or information from the trust or the institution, as he thinks necessary and he is also empowered to make suc .....

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trary to public policy and are, in fact, 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 .....

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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 profit earning or misuse of the income derived by charitable institution from its charitable activities, may be a ground for refusing exemption only with respect to that part of the income but cannot be taken to be a synonym to the genuineness of the activities of the trus .....

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stration under s. 12A, is actually in the activities which are genuine. Genuineness of the activities of the trust or the institution has to be seen, keeping in mind the objects thereof, which necessarily means that the CIT shall satisfy himself about the fact that the activities are genuine and in consonance with the objects of the trust or the institution. In other words, if establishing and running a school is the object of the society, as given in its bye-laws, it has to be satisfied that th .....

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sidering the question of registration. On this parameter, the genuineness or otherwise of donations received has no reflection on the activities carried out by the assessee society. Because the donations are found to be bogus, it does not as a corollary mean that the activities of the trust are not genuine. These issues can be examined during assessment proceedings and not while granting registration u/s 12A to a Trust / Society. Even otherwise we find that the assessee had submitted complete de .....

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ne, nor could the blame in the present circumstances be placed at the door of the assessee society. 12. Besides we find that Audited Financial Statements of the assessee society for the year ended 31/03/2007, 31/03/2008, 31/03/2009, 31/03/2010 & 31/03/2011 were also filed before the ACIT/CIT. The details of these financial statements clearly reflected that the assessee society had begun running an educational institution going by the name of Royal College of Education & Research Centre i .....

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r school going by the name of Pearl Valley School and commenced educational activity in the same also showing excess of expenditure over income of ₹ 1,85,585/- with assets of ₹ 5,54,425/-. Besides educational activity were being carried on in the Royal College of Education & Research Centre also and in the year ending 31.03.2011 there was excess of income over expenditure of ₹ 36,464/- and the WDV of assets totalled at ₹ 1,83,382/-. From the above facts it is amply cl .....

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efore it can be safely concluded that the activities of the assessee society were charitable and were being genuinely carried out by it. ‌13. In view of the same, we hold that Ld. CIT could not have refused registration under section 12AA to the assessee society. The recommendation of the ACIT who had conducted the enquiry in this regard also confirm the fact that the assessee was eligible for grant of registration under section 12AA. The ACIT had very clearly stated that the assessee socie .....

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eport on the application for registration u/s 12AA of the Income Tax Act, 1961 filed in form No. 10A on 09/08/2012 by the above named Society in duplicate in prescribed pro-forma. The Society is presently engaged in imparting education at higher level by running course of B.Ed/D.Ed at Royal college of education & research Centre located at Sitholi, Dabara Road Gwalior and Primary level Pre-Primary School in named Pearl Velly School located at Geeta Colony, Dal Bazar Gwalior. Objects of the S .....

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ecessary action please. Yours faithfully ‌Encl: As above Sd/- (S.L. Katara) Asstt. Commissioner of Income Tax Circle-2, Gwalior Further the inspector deputed to conduct enquiry about the activity being carried out by the assessee society also clearly stated that the activity were in the nature of imparting education. The inspectiors report is being reproduced here under: Inspection Enquiry Report As directed I visited office premises of Chetanya Shiksh Evam Vikas Parishad situated at 61. Ge .....

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