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TMI Blog2015 (1) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax, declined the registration on the ground that the activities of the society are commercial in nature and not charitable. In arriving at the above conclusion, he has observed that the society is being run in the manner of a business entity, where it is incurring sizeable expenditure on advertisement and publicity. Furthermore, there is increase in capital expenditure, which shows that society is engaged in expansion so as to earn more receipts, rather than concentrating on parting education. 3. Before us, the ld counsel Shri Piyush Kaushik, submitted that It is undisputed that the assessee being a society registered under the provisions of Society Registrations Act 1860 has been incorporated essentially with the main obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that appellant is a society engaged in imparting education. The issue therefore arises is whether in such circumstances, such a society could be declined registration u/s 12AA of the Act. In this regard we considered it appropriate to refer and rely on the judgement of the Allahabad High Court in the case of CIT Vs. Red School 212 CTR 394, wherein it has been held:- "The preponderance of the judicial opinion of all the High Court including this Court including this Court is that at the time of claiming exemption under Section 11 12 of the Act, The Commissioner of Income Tax is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set to achieve its objects of estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor and the Trust will be examined, for orders to be made in accordance with law." 6. This view has been elucidated in the case of CIT Vs. Red Rose School 212 CTR 394 (All), wherein it has been that to ascertain the genuineness of the activities of the trust the institution whose object do not run contrary to public policy and are infact charitable purpose, the CIT is empowered to make enquiries as he think fit. In case the activities are not genuine and they are not being carried out in accordance with Object of the trust society or the institution, registration can again be refused but on mere presumption and on surmise that the income is being misused or that there is some apprehension that same would not be used in the proper manner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaken in India. If the Indian activity has no co-relation to education, exemption has to be denied (see judgement of this Court in Oxford University Press (supra) Therefore the character of the recipient of income must have character of educational institution in India to be ascertained from the nature of the activities. If after meeting expenditure, surplus remains incidentally from the activity carried on by the educational institutions, it will not cease to be one existing solely for educational purpose. In other words, existence of surplus from the activity will not mean absence of educational purpose. (see judgement of this Court in Aditanar Education Institution Vs;. Addl. CIT (1997) 139 CTR (SC) 7; (1997) 224 ITR 310 (SC). The t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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