TMI Blog2022 (5) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... e account of assessee no such income was reflected from coaching centre. The number of years the assessments were done by the revenue authorities u/s 143(3) for assessee. But no specific point was pointed out related to maintain of coaching centre. So, the rejection of the registration on the basis of ancillary object i.e. running coaching centre is uncalled for. The accounts of assessee are not being maintained in systematic manner - The assessing authority did not raise any question during assessment U/s 143(3) of the Act related maintenance of books of accounts. The ld CIT(E) did not recognise any specific lacuna in the books of assessee. All three reasons are not proper indication for rejecting the application of registration u/s 12A. For registration u/s 12A the steerage of the Act is that the identity of assessee and the activity relating to the main object of the society. In following two points was not properly considered by the ld. CIT(E). The maintaining a coaching centre only was incorporated in the order of the CIT(E). But no proper verification was done from the books of account and from the activities of the assessee by revenue. Related to maintenance of prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance the society. However, as per Mr Kapoor the MOA of the assessee-society was amended. The resolution was executed on dated 02/12/2013 by the executive members of the society, in which, the dissolution clause was duly inserted. Copy of the resolution on dated 02/12/2013 is reproduce hereunder:- Shaheed Bhagat Singh Education Society VPO Varpal Distt. Amritsar. The Member of Shaheed Bhagat Singh Educational Society met on 2nd day of December 2013, at registered office at village Varpal. It has been observed that the Memorandum governing the Society Does not provide for closure clause of the Society and no instructions have been laid out regarding the disposal of the assets so created in achievement of goals of society. At the Meeting held today and as is essential to do so it is resolved as under: The Society shall continue to exist and if on any unavoidable circumstance the society has to closed and wound up then the assets created in name of society plant machinery building any movable or immovable assets so created will be used only for educational acts and no other personal benefit of the members of the society. On closure the assets will be transfered onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration cannot be denied based on existence of any ancillary object. In the present case the appellant had never provided any activity other than the education of student enrolled in the school. Further the society is running a school affiliated under the CBSE Board which does not allow to operate any coaching centre. Mr Kapoor further relied on in the case of Bhai Gurdas Educational Trust vs. CIT, Patiala [2015 (8) TMI 1365] in the same context. 6.2. The ld. CIT-DR only relied on the order of the CIT(E) and vehemently objected the submission of the counsel considering the factual matrix. It is no doubt that maintaining a coaching centre is not a charitable work. On other hand, in the factual matrix the activity of the assessee-society had never run coaching centre. Also, a CBSE School cannot run a coaching centre as per the guidline of Board. Also income of the expenditure account of assessee no such income was reflected from coaching centre. The number of years the assessments were done by the revenue authorities u/s 143(3) for assessee. But no specific point was pointed out related to maintain of coaching centre. So, the rejection of the registration on the basis of ancill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore find that this around for rejecting registration u/s 12AA is not correct. vi) Furthermore, the appellant society had not claimed depreciation till F.Y. 2014-15 and started to claim the same from F.Y. 2015-16. The said claim was made for the first time due to the amendment made by finance act 2015. It is matter of record that the appellant society had not claimed application in any of the previous years and considering the amendment in section 11(6) depreciation shall not be allowed while computing income subject to application against those assets which have been treated as application in earlier years. Therefore, it is pertinent to mention or a mere reason that depreciation was not claimed up to 2014-15 and claimed from cannot render the books of accounts unreliable/ unsystematic. vii) The CIT(E), before alleging that the financial statements were not being maintained in systematic manner, must bring on record material on the basis of which he has arrived at the conclusion with regard to correctness or completeness of the accounts of the assessee or the method of accounting employed by it. The obligation on the part of the appellant is to bring the accounts/docume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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