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TMI Blog2018 (10) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of 12AA matters? (ii) Whether on the facts and circumstances of the case the ITAT has erred in directing the grant of approval u/s 10(23C)(vi) ignoring the fact that the dissolution clause of the society is designed in a manner to give undue advantage to the Chairman, President and Secretary of the society and that in the event of dissolution of the society the possibility of its fund being mis-utilized was high? (iii) Whether on the facts and circumstances of the case, the order of the Appellate Tribunal is contrary to the evidence and material on the record of the case and therefore, perverse? 3. The respondent in the present appeal is a Society and set up with the objective of providing education in the field of medicine, health care, engineering and technical education alongwith primary and secondary education to the students and for providing medical services. The Society is also running a Nursing College. The respondent-society applied for grant of exemption under Section 10(23C)(vi) of the Act in the assessment year 2014- 15. The application was made on 24.09.2014. The Chief Commissioner of Income Tax, Ludhiana (for short "CCIT") issued a notice dated 09.09.2015. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of dissolution has been specified. Thus, there is possibility of funds/properties of applicant being mis-utilized in the event of dissolution. In the absence of any dissolution clause the trust cannot be considered charitable. Since section 10(23C)(vi) is applicable only to charitable institution, the applicant is not eligible for approval."" 9. Being aggrieved of the order passed by the CCIT, the respondent-society preferred an appeal before the Tribunal. The Tribunal vide order dated 25.04.2017 allowed the appeal, set aside the order of CCIT and directed that the respondent-society be granted approval under Section 10(23C)(vi) of the Act. Hence, the present appeal. 10. Learned counsel for the appellant argued that the Tribunal erred in allowing the appeal. There is no valid dissolution clause in the Memorandum of Association of the society. In case of dissolution of the Managing Committee all the movable and immovable property shall be managed by the Chairman, President and Secretary of the Society and in that event the benefit accruing from the trust to these three persons would be covered under Section 13(3) of the Act. Reliance has been placed upon the Division Bench deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xx "(vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority: or xx xx &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the society and that there is no dispute regarding genuineness of the activities of the society. The reliance was placed upon the assessment order passed under Section 143 (3) of the Act for the assessment year 2012-13. There were categorical findings by the Assessing Officer that the object of the society was educational and it was existing only for educational purposes. 17. The Tribunal has rightly held that the reason for rejection by the CCIT cannot be sustained as the benefit which may or may not accrue under Section 13(3) of the Act, does not have any effect on the genuineness of the activities of the trust. The eventuality relied upon by the CCIT is based on surmises without there being any definite basis that any misutilisation would occur for sure in future. 18. The relevant portion of the order of the Tribunal is reproduced below: "11. We find that based on the above inquiry conducted by the ld. Chief CIT and the documents placed before him, no adverse view regarding either the objects or the activities of the assessee society not being wholly for the purpose of education, which is a sine qua non for the purpose of claiming exemption u/s 10(23C)(vi), has been ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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