TMI Blog2020 (2) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 6-1-2020 - Shri Justice Ajay Kumar Mittal, Chief Justice And Shri Justice Vijay Kumar Shukla, Judge For the Appellant/Department : Shri Sanjay Lal, Advocate ORDER (Oral) PER : AJAY KUMAR MITTAL, CHIEF JUSTICE Challenge in this appeal filed under Section 260-A of the Income Tax Act, 1961 (for short the Act ) is to an order dated 5.10.2018 passed by the Income Tax Appellate Tribunal, Indore in ITA No.1034/Ind/2016 whereby the appeal filed by the assessee was allowed and the order passed by the CIT(E), Bhopal was set aside. 2 . The appellant has claimed the following substantial question of law for determination by this Court:- Whether, on the facts circumstances of the case, the ITAT is correct in directing the Ld. CIT(E) to grant the registration u/s 12AA of that Act irrespective of the findings by the CIT(E) that the society exists for the purpose of profit of the office bearers not for charitable purpose thus attracts proviso to section 13 (1) (c) of the I.T. Act ? 3 . Brief facts of the case are that the respondent-Divine Shiksha Samiti (for short the assessee Society ) applied for registration under Section 12AA of the Act befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety. The rent agreement with the office bearers of the assessee Society do not provide for expenses on maintenance and taxes to be borne by the assessee Society, though the assessee Society had incurred the expenses amounting to ₹ 7,89,850/- for the year 2014-15 and, therefore, it could be said that the funds of the assessee were being diverted for personal purpose of office bearers and families. On the aforesaid premises, the CIT, Bhopal came to the conclusion that the assessee Society is for the purpose of profit of the office bearers and not for charitable purposes. The assessee had furnished its explanation/information regarding the land area of the building, rental received per month, built up area, number of rooms etc. before the Tribunal controverting each reason adopted by CIT, Bhopal to deny registration to the assessee. It would be apt to notice the detail explanation tendered by the assessee before the Tribunal which is in following terms:- That on the facts and circumstances of the case, the learned CIT (Exemption) erred and was not justified in refusing the registration u/s 12AA of the Income Tax Act. Your Honors , It is respectfully submitted as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31500/- 56500/- In rent agreement, it is clearly mentioned that there is an open land also a play ground Your Honors, as seen from above there is no disproportionate rent. It appears that the Learned CIT (Exemption) has taken criteria of numbers of rooms only disregarding built up area and open land. In any case the rent paid is well within the fair rental value as assessed by the office of PWD. Copy enclosed at PB Page No.58 to 63 Specific observations on the rent paid are as under :- i. Lissy Babu :- In the premises of Lissy babu, there was open land for playground which has also been mentioned in rent agreement. The learned CIT (Exemption) totally ignored the area of open land. The open land area was 20511 sqft. Copy of Rent agreement and sale ded are enclosed as per PB Page No.31 to 42 ii. Babu Antony :- In the premises of Babu Antony, there was open land for playground. The learned CIT (Exemption) totally ignored the area of open land. The open land are was 32000 sqft. Further no built up area has been mentioned whereas built up area is 3000 Sq. Ft. on ground floor. Copy of Rent Agreement and sale deed are en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tures, repair of Lab equipments, projectors, sports equipments, office equipments and computers. Copy of ledger account to explain, is enclosed as per P.B. Page No.64 to 74 Summary of repair and maintenance expenses of ₹ 7,89,850/- is as under :- Heads Amount Repair and Maintenance for Furniture ₹ 79,133/- Repair and Maintenance for Computer ₹ 44,743/- Repair and Maintenance for Lab Equipment ₹ 24,800/- Repair and Maintenance for electricity ₹ 98,320/- Repair and Maintenance for Sanitation (Plumbing etc) ₹ 41,600/- Expenses on Maintenance of garden ₹ 61,200/- Expenses on Maintenance of Cleanliness ₹ 1,31,699/- Expenses on whitewash of Building about 26700 sq. ft. built up area ₹ 1,75,780/- Expenses on Maintenance of playground ₹ 18,800/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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