TMI Blog2018 (2) TMI 1647X X X X Extracts X X X X X X X X Extracts X X X X ..... UNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER For The Appellant : Shri Aditya Agarwal, C.A. For The Respondent : Shri J. S. Minhas, CIT, D.R. ORDER PER T. S. KAPOOR, A.M. This is an appeal filed by the assessee against the order of CIT (Exemptions) passed u/s 12AA of the Act. 2. At the outset, Learned A. R. submitted that assessee is a non profit association registered under the Societies Registration Act, 1860 for carrying out charitable activities. The assessee had applied for registration u/s 12AA which the CIT (Exemptions) has refused. Learned A. R. submitted that at the time of registration u/s 12AA the only aspect which CIT (Exemptions) is expected to examine is object of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one through the material placed on record. We find that is an admitted fact that the objects of the society, as mentioned in the bye-laws placed at pages 62 to 72 of the paper book, are charitable in nature. The CIT (Exemptions) has also not doubted the charitable nature of the objects and he has rejected the application by holding that there was no cogent or corroborative evidence to prove the genuineness of activities whereas the fact remains that the assessee had filed copies of audited financial statements for the financial year 2013-14 to 2015-16 and had also filed copies of income tax return which clearly establish that assessee was running a college. Therefore, this finding of CIT (Exemptions) that genuineness of the activities could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here 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 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, and says that in such a situation, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the conditions given in Sub-clauses (a) and (b) are complied with. This also means that even that income, which could not be exempted under sub-clause (a) or (b) of Sub-section (i), can still be exempted, if the conditions attached to Sub-section (2) in its Sub-clauses (a) and (b) are complied with. 24. Sub-section (3) again says that if any income referred to in Sub-section (2) is applied to purposes other than c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at section and Section 13 shall apply accordingly. The provision thus, emphasizes upon the income of the trust created wholly for charitable or religious purposes or an institution established wholly for such purposes and so is the case in Sub-section (2) of the aforesaid section. The provisions of Section 13 excludes the applicability of Section 11 in certain cases. 26. A cumulative reading of the aforesaid provisions leaves no manner of doubt that exemption under the aforesaid provisions can be claimed with respect to the income derived by the trust or the institution, which is being run for a charitable purpose and, therefore, while considering the registration under Section 12AA, the scope of enquiry of the CIT, would be lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the society, as given in its bye-laws, it has to be satisfied that the society has established the school, where education is being imparted as per rules and the factum of establishment and running school is a genuine activity. The enquiry regarding genuineness of the activities cannot be stretched beyond this. 4.2 In the present case, undoubtedly the objects of the assessee are charitable in nature and the assessee is running a college for achievement of its objects as given in the bye-laws. Therefore, the registration cannot be denied by holding that the activities of the assessee were not genuine. In view of the above, CIT (Exemptions) is directed to grant registration to the assessee u/s 12AA of the Act. 5. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
