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2024 (4) TMI 582 - ITAT DELHIExemption u/s 11 - rejection of assessee’s application for registration u/s 12A - application rejected primarily on the basis that the assessee would be promoting business of manufacturing and marketing of pharmaceutical drugs of the entities who had sponsored the research work - whether the objectives of the assessee are charitable or not? - HELD THAT:- CIT(Exemption) has not doubted about the charitable nature of the objectives, but rejected the application primarily on the basis that the assessee would be promoting business of manufacturing and marketing of pharmaceutical drugs of the entities who had sponsored the research work. There cannot be any doubt that imparting awareness amongst the patients in respect of diseases which badly affected the health of the individual, is certainly a charitable activity. In our considered view at the stage of registration the learned CIT(Exemption) is required to examine the objectives of the assessee, whether such objectives would fall under the category of charitable or not. Whether the assessee incurred expenses on such activity or not can be verified by the assessing authority and if it is found that the assessee is not carrying any charitable activity and the expenditure is incurred for promotion of business of other entity, the AO is empowered to disallow the expenditure and request for cancellation of registration. See FIFTH GENERATION EDUCATION SOCIETY VERSUS COMMISSIONER OF INCOME-TAX [1990 (5) TMI 38 - ALLAHABAD HIGH COURT] Commissioner is not to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of section 12A read with rule 17A and whether Form No. 10A has been properly filled up.The order impugned does not say that the objects of the society are not charitable in nature; it merely says that they are general in nature. Just because they are general, they do not cease to be charitable. The Commissioner has also observed that no activity has been carried on by the society. It is also not the requirement of section 12A of the Act We restore the application to the file of learned CIT(Exemption) to grant registration in accordance with law. Decided in favour of assessee.
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