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TMI Blog2018 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration 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 recital of objects or activities without cogent or corroborative evidence is not sufficient by themselves to enable a registering authority to grant registration. In this respect, Learned A. R. submitted that assessee had filed copies of audited balance sheet and income and expenditure account as at 31st March, 2016, copy of which was pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration as the Assessing Officer is well empowered to oook into this aspect at the time of assessment. Therefore, it was prayed that CIT (Exemptions) be directed to grant registration to the society. 3. Learned D. R., on the other hand, relied on the order of CIT (Exemptions) and argued that assessee had not produced books of account and vouchers and had also taken unsecured loans, the genuineness of which was not proved. Learned A. R. in his rejoinder stated that it is a wrong finding of learned CIT(A) that books of account were not 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivities of society with respect to achievement of those objects. Hon'ble Allahabad High Court in the case of CIT vs. Red Rose School [2007] 212 CTR (All) 394 has exhaustively examined the provisions of section 12AA of the Act and has held that CIT (Exemptions) has to satisfy himself about the genuineness of the activities of the trust and also the objects of the trust or institution. The Hon'ble court has further held that CIT (Exemptions) is empowered to make inquiries, as he thinks fit, to verify as to whether the activities are genuine or not but on mere presumption and surmises that income derived by the trust or institution will be misused or that there is some apprehension that the same would not be used in a proper manner, ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilised for the purpose for which it is so accumulated or set apart during the period referred to in Clause (a) of that sub-section or in the year immediately following the expiry thereof, or is credited or paid to any trust or institution registered under Section 12AA or to any fund or institution or trust or institution registered under Section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in Sub-clause (iv) or Sub-clause (v) or Sub-clause (vi) or Sub-clause (via) of Clause (230 of Section 10, shall be deemed to be the income of such person of the previous year in which it is so applied or ceases to be accumulated or set apart or ceas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration has to be considered in the light of the specific provisions aforesaid and in the manner that it furthers the object of the scheme of registration and, of course, exemption of the entire income or the part of the income, as the case may be, of a charitable trust or institution has to be considered during assessment proceedings. 28. It is significant to mention that registration under Section 12AA, does not necessarily entitle the assessee to get the income excluded from the income of the previous year for the purpose of determination of tax liability but it only entitles the assessee to claim such exemption, which otherwise could not be claimed in the absence of registration. The enquiry by the CIT shall remain restricted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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