2016 (2) TMI 887 - AT - Income Tax

Eligibility of registration u/s 12AA - Held that - It is now well settled that at the time of grant of registration u/s 12AA, the ld. Commissioner is required only to examine the objects of the society. A bare perusal of the objects of society makes it clear that the pre-dominant object of the society is to impart education. - Decided in favour of assessee As we have directed for registration of society u/s 12AA in terms of observations the assessee s claim for approval u/s 80G(5)(vi) is allowed.

Summary

Issues involved:
1. Registration of society under section 12AA(1)(b)(ii) of the Income-tax Act, 1961.
2. Approval under section 80G(5)(vi) of the Income-tax Act, 1961.

Analysis of the Judgment:

Issue 1: Registration of society under section 12AA(1)(b)(ii):
The appellant, a society, had applied for registration under section 12AA(1)(b)(ii) of the Income-tax Act, 1961. The Commissioner rejected the application citing that the society did not meet the charitable essence required for registration. The Commissioner highlighted that charging hefty fees for services rendered by educational institutions was outside the scope of charitable activities. The Commissioner also referred to a High Court decision to support the rejection. However, the appellant argued that the Commissioner should only consider the trust's objects at the time of registration. The Tribunal, after considering the objects of the society, emphasized that the predominant purpose was to impart education, which is considered a charitable activity. The Tribunal referred to previous judgments to support its decision and directed the Commissioner to grant registration to the society. The Tribunal found no evidence of misuse of income for non-charitable purposes, supporting the society's charitable nature.

Issue 2: Approval under section 80G(5)(vi):
The Commissioner had rejected the society's application under section 80G(5)(vi) due to the absence of registration under section 12AA. Since the Tribunal directed the registration of the society under section 12AA, the society's claim for approval under section 80G(5)(vi) was allowed, and the appeal was also allowed accordingly.

In conclusion, both appeals of the society were allowed by the Tribunal, directing the registration under section 12AA(1)(b)(ii) and approving the claim under section 80G(5)(vi) of the Income-tax Act, 1961. The Tribunal's decision emphasized the charitable nature of the society's activities, particularly in the field of education, and highlighted the importance of examining the trust's objects for registration purposes.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented, and the Tribunal's decision regarding the registration and approval of the society under the relevant sections of the Income-tax Act, 1961.