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2014 (8) TMI 419 - HC - Income TaxGrant of registration u/s 12A - Objects of the society not examined Running of school - Purpose charitable or not - Held that - The main objects of the society as per its MOA are to provide advancement research and dissemination of education-literary, scientific and scholastic, to start, establish, run, manage and maintain schools with an object to provide sound pre-primary, primary, middle, secondary and higher education - Following the decision in Suchinta Educational Society Versus Commissioner of Income Tax-I 2014 (5) TMI 155 - PUNJAB & HARYANA HIGH COURT - running of a school falls within the scope of activities for which registration can be granted u/s 12AA of the Act - The Society has been established to manage one of such schools - There cannot be any attempt of the assessee to evade tax liability, as Shishu Niketan Model School has been granted registration and availing the benefit of tax Decided in favour of Assessee.
Issues:
1. Interpretation of Section 12A of the Income Tax Act, 1961 regarding the essentiality of carrying out charitable activities for registration. 2. Examination of aims and objects of the appellant society for the grant of registration under Section 12A. 3. Comparison of the present case with a similar case involving the registration of a school under Section 12AA. Analysis: Issue 1: Interpretation of Section 12A The appellant society, registered under the Societies Registration Act, 1860, applied for registration under Section 12A of the Income Tax Act, 1961. The Commissioner of Income Tax rejected the application citing a lack of charitable activities as per the balance sheet. The appellant contended that the inquiry for registration under Section 12AA should focus on the society's objectives rather than the actual activities carried out. The Tribunal upheld the Commissioner's decision, leading to the appeal. The High Court noted the appellant's argument citing precedents but ultimately relied on a previous judgment involving a similar educational society. The Court emphasized that the running of a school falls within the scope of activities for registration under Section 12AA, and since the school in question was already registered, the appellant should also be granted registration. Issue 2: Examination of Aims and Objects The appellant society's main objective was to provide education and manage a school previously registered under Section 12AA. The Commissioner denied registration due to the lack of charitable activities as evidenced by the balance sheet. The appellant argued that the focus should be on the society's objectives rather than the actual activities carried out. The High Court agreed with the appellant, emphasizing that the primary consideration for registration under Section 12AA should be the society's aims and objects, especially when the activities fall within the permissible scope. Issue 3: Comparison with Previous Case The High Court compared the present case with a previous judgment involving a similar educational society. In that case, the society's activities were found to be genuine, focusing on running a school for the benefit of its members. The Court highlighted that the school's activities fell within the permissible scope for registration under Section 12AA. Drawing parallels, the Court ruled in favor of the appellant, emphasizing the importance of the society's objectives and the permissible activities for registration under the Income Tax Act. In conclusion, the High Court allowed the appeal, answering the substantial questions of law in favor of the appellant based on the interpretation of Section 12A, examination of the society's aims and objects, and comparison with a similar case involving the registration of a school under Section 12AA.
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