TMI Blog2018 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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. - Decided in favour of assessee. - ITA No. 48/Lkw/2017 - - - Dated:- 28-2-2018 - Shri T. S. Kapoor, Accountant Member And Shri Partha Sarathi Chaudhury, Judicial Member Appellant by : Shri Rakesh Garg, Advocate Respondent by : 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) dated 18/11/2016. 2. At the outset, Learned A. R. submitted that 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 the object of the assessee and genuineness of the activities of the assessee for achieving of these objects. It was submitted that objects of the society are charitable in nature and a copy of the objects was placed in paper book pages 78 to 96. He submitted that vide para 4 of his order, CIT (Exemptions) has held that mere re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced and invited our attention to pages 2 10 of the paper book where letters stating that books of account are produced for verification are placed. 4. We have heard the rival parties and have gone through the material placed on record. We find that is an admitted fact that the objects of the society, as mentioned in the Memorandum and Articles of the Samiti, placed at pages 78 to 96 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 balance sheet and income and expenditure account as at 31st March, 2016 and had also filed copies of income tax return which clearly establish that assessee was rendering the services which are charitable in nature. Therefore, this finding of CIT (Exemptions) that genuineness of the activities could not be verified is not based upon the facts. The argument of Learned D. R. that books of account and vouchers were not produced does not carry any force in view of the spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution 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 trust or the institution. This is more evident if we see the provisions of Section 11, which, while exempting the income given in its various subclauses from being included in the total income of the previous year of the person in receipt of the income, for example, in subclause (i) says 'income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property. 22. The aforesaid provision thus, clarifies that all that income, which is derived from the property held under the trust wholly for charitable purposes or religious purposes, shall stand exempted to the extent to which such income is applied to such purposes in India but if the income is accum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes, shall for the purposes of Section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that 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 limited to the aforesaid extent. 27. Since in the absence of such registration, the trust or the institution would not be entitled to claim an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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