TMI Blog2017 (12) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... d as autonomous body should have changed the objects and Memorandum of Association also do not have any force as the facts and circumstances of society and constitutions of members remained same and objects of the society also remained same and the only purpose of declaring the society as autonomous body was that it should be run as an autonomous body in line with the rules laid down by All India Council of Technical Education. The amendment in the byelaws of society has nothing to do with the objects of society which undoubtedly are charitable in nature. As regards the objection of CIT(E) that assessee was running a school which has not been mentioned in the byelaws, we find that the objects of the society as contained in the Memorandum of Association placed at P.B. page 6 to 10 are to provide for instruction and research in such branches of Engineering and Technology as the College may think fit and for the advancement of learning and dissemination of knowledge in such branches. The object clause noted above is for providing education and education does include running of school also. In fact in accordance with the instructions of Director of Technical Education and Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption only when the receipts were below ₹ 1 crore and since the receipts had crossed more than ₹ 1 crore, therefore the assessee had right to apply for registration u/s 12AA of the Act. The other objection raised by Ld. CIT(E) was that assessee had been declared as autonomous body by the Technical Education Department and therefore it should have revised MOA/ byelaws which the assessee had not done. In this respect, the Ld. AR submitted that there was no change in the composition of the society before and after the society was instructed to run the college as autonomous body and even otherwise the department has taken a narrow meaning of the word autonomous. It was submitted that meaning of autonomous body is to run the administration independently on the basis of by laws and the administration of the college has to be governed by the laws laid down by the All India Council of Technical Educations. It was submitted that the college was declared as autonomous body for the working of college for the purpose of education and not for any other purposes as assumed and presumed by the department and there was no need to amend Memorandum of Association as objects of the socie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that society was also running school as per the order of Govt. of Punjab and therefore the non grant of registration to the society was a step motherly treatment with this institution. In view of the above, it was submitted that the Ld. CIT(E) has raised irrelevant observations for refusing to grant the registration. The Ld. CIT(E) did not appreciate that only two conditions have to be satisfied while granting the registration u/s 12AA of the Act, that the objects of the society should be charitable in nature and the activities should be genuine. It was argued that from the plain reading of the order it is clear that the Ld. CIT(E) has neither objected to the objects of the trust which are charitable and CIT(E) has never doubted the genuineness of the activities of the trust and as such, the Ld. CIT(E) was not justified in refusing to grant the registration and reliance in this respect was placed on the Judgment of Punjab Haryana High Court in the case of CIT(E) Vs. Shri Sirdi Sai Darbar Charitable Trust in ITA No. 38 of 2017 dated 27.03.2017. The Ld. AR placed his reliance on a number of decisions placed in P.B. page 1 to 34 for the proposition that at the time of granting regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge any capitation fee and existed for the purpose of education only which is apparent from the objects clause of the Memorandum of Association. As regards the argument of Ld. DR that assessee should have applied exemption u/s 10(23)(ii)(vi) of the Act, the Ld. AR submitted that in view of alternative remedies, the assessee was free to avail exemption under any of these alternative provisions and assessee choose to get exemption u/s 12 AA of the Act and if the Assessee fulfilled the conditions for grant of registration u/s 12AA the Ld. CIT(A) is bound to grant registration. 6. We have heard the rival parties and have gone though the material placed on record. We find that the objections raised by Ld. CIT(E) for refusing to register the society u/s 12AA of the Act are not relevant for considering the registration under that section. The objections of Ld. CIT(E) that assessee had been claiming exemption u/s 10(23)(iiiab) and therefore he should not have filed the application u/s 12AA of the Act has no force as the assessee is free to avail registration under any alternative provisions if more than one alternatives are available and if in accordance with the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered with Punjab School Education Board. Mere non mentioning of all schools and colleges in the Memorandum of Association does not disentitle the assessee for getting registration u/s 12A of the Act. The copy of the notification as placed in P.B. page 132 has been made part of this order. The above said notification list includes the assessee also which is indicated at column no. 1 and therefore the objections of Ld. CIT(E) is not relevant. Moreover we find that under similar facts and circumstances, another assessee at Ferozepur by the name of SBS College of Engineering and Technology has been granted registration vide order dated 19.09.2016 placed at P.B. page 156 to 157. The name of said assessee is appearing at column no. 2. Therefore under same facts and circumstances the Ld. CIT(A) should have granted registration to the society. It has been held by various courts including by Hon'ble Supreme Court of India that at the time of registration of a society u/s 12A of the Act, the only requirement is that Ld. CIT(E) should be satisfied about the objects of society and should be satisfied with the genuineness of activities of the society with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said that the activities of the assessee are not genuine. Reliance placed by the learned counsel for the assessee on the judgment of the Allahabad High Court as well as the order of the Chennai Bench of the Tribunal are not out of place, whereby it has been held that non-filing of return cannot be one of the reasons for denying registration under Section 12A of the Act. With regard to the second objection raised by the Commissioner of Income Tax (Exemptions) that as per clause 12 of the Memorandum of trust, the trustees have been given absolute powers to manage the property. We have perused the clause-12 of the Memorandum of the trust, whereby the trustees are authorized to demise the immovable property or properties of the trust either from year to year or for any fixed term or for any term of years or on monthly basis at such rent and subject to such conditions as they deem fit and proper and also accept surrender of lease and may manage the property as they think proper. From the perusal of this clause, we observe that the trustees have been given powers to give property of the trust on lease or on rent. We do not find anything wrong in this clause so as to deny the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant: Provided that no order under sub-clause (if) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day. (2) Every order g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the CIT. Vide order dated 27.08.2013 (Annexure A-l), the CIT refused to grant registration to the assessee-Society, inter alia, on the ground of nonproduction of documentary evidence in respect of aims and objects of the society, absence of audited financial statements and non-explanation regarding registration of the society twice with the Registrar of Firms and Societies, Chandigarh, Aggrieved by the order, the assessee filed an appeal before the Tribunal. The matter was considered in detail by the Tribunal. It has been categorically recorded by the Tribunal that one of the objects of the Society as mentioned in its bye-laws was to provide free medical aid by opening hospitals, diagnostic centers, maternity home and by organizing special medical camps. These activities had also been demonstrated in the previous three years by the respondent-assessee in its Balance Sheet, Income Expenditure account, Receipt payment Account which were produced before the CIT. Further, the CIT had not commented adversely on the documents placed before it. With regard to the reason that the assessee had not furnished audited financial statements, it has been recorded by the Tribunal that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the activities of the trust were genuine or not, which is corroborated by the fact that even the provisions of the Income Tax Act, 1961, do not require audited financial statements to be furnished, while seeking registration under Section 12AA. Rule 17A of the Income Tax Rules, 1962, list the documents which should accompany the application under section 12A for registration of charitable or religious trust or institution. At point no.(b) of the Rules it is stated that where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up have to be submitted. Clearly as per the Rules, the requirement is furnishing of only the accounts of the trust or institution seeking registration and nowhere the word audited accounts have been used. Therefore the non furnishing of audited financials cannot by itself be a criteria for holding the activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued on 17/09/1974 and the present working is also under going under it. No bad intentions are there. The Society in year 2009 was formed by the Ex-President and Finance Secretary but which has no relevance as on date and the Society documents i.e. Governing Body list on yearly basis is being submitted to Registrar of Firms Societies, Chandigarh for Society registered on 17/09/1974. We therefore find that the contention of the Ld. CIT that the assessee had offered no explanation about the registration of the society twice is not correct. In any case registration of a society is not a pre condition for granting registration under Section 12AA. A perusal of Rule 17A of the Income Tax Rules 1962, referred to above would show that the only requirement is to furnish the documents evidencing the creation of the trust or establishment of the institute in original, which we find, the assessee society has furnished in the form of Trust Deed. 16. In view of the facts stated above we hold that Ld. CIT was not right in refusing registration to the assessee society for non-furnishing of explanation regarding registration of the assessee society twice. In cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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