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2017 (2) TMI 653 - AT - Income TaxRegistration u/s 12AA denied - non charitable activities - Held that - The society was mainly established with the object for skill imparting by the Industrial Training Institute and to keep pace with qualitative and technological demands in the industry. It is noticed that all the objects of the society are for advancement of benefit of general public. The activities of the society are being run for non-profit motive. The profit of the society is not distributed among the members of the society. The aims and objects of the society are charitable in nature as per Section 2(15) of the Act which covers the definition of charitable purposes as (a) Relief of the poor,(b) Education,(c) Medical Relief and (d) Advancement of any other object of general public utility On perusal of the order of the ld. CIT (Exemption), it is also observed that he has not given any finding about the object of the society whether any aims and objects are not charitable in nature. Hon ble Allahabad High Court in the case of Fifth General Education Society vs. CIT 1990 (5) TMI 38 - ALLAHABAD High Court had also opined that at the time of considering the application for grant of registration u/s 12A, the ld. CIT was not required to examine the application of income or carrying on of any activity by the trust. Thus CIT (exemptions) is directed to grant registration to the assessee society. Thus the appeal of the assessee is allowed.
Issues:
Appeal against rejection of registration u/s 12AA of the I.T. Act, 1961 by ld. CIT (Exemptions), Jaipur. Analysis: The assessee appealed against the rejection of registration u/s 12AA of the I.T. Act, 1961 by the ld. CIT (Exemptions), Jaipur. The grounds for appeal included the contention that the activities of the society were charitable as per Section 2(15) of the I.T. Act, and the denial of registration was deemed arbitrary and against the law. The ld. CIT (Exemptions) based the rejection on the absence of charitable activities in the Income & Expenditure account and the earning of interest income on an interest-free loan from the Government of India. The Tribunal noted that the society was established for skill imparting and advancement of public benefit, with objects aligned with charitable purposes. The Tribunal highlighted that the society's profit was not distributed among members and could only be dissolved with State Government consent, transferring assets to a similar society. The Tribunal found the aims and objects of the society charitable under Section 2(15) of the Act. The Tribunal observed that the ld. CIT (Exemptions) did not question the genuineness of the society and failed to provide findings on whether any aims and objects were non-charitable. Citing legal precedents, including opinions from the Allahabad High Court and Delhi High Court, the Tribunal emphasized that registration should be based on the charitable nature of the trust's objects, not the commencement of charitable activities. Referring to a previous ITAT Jaipur Bench order, the Tribunal directed the CIT (Exemptions) to grant registration to the society. The Tribunal concluded that the appeal of the assessee was allowed, based on the facts, circumstances of the case, and relevant case laws cited. Therefore, the Tribunal upheld the appeal, directing the CIT (Exemptions) to grant registration to the society, emphasizing the charitable nature of the society's objects and activities as per Section 2(15) of the Act.
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