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TMI Blog2013 (8) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... of offering funds of Rs. 12,00,000/- as collateral security and also the fact that the grants were not voluntary contribution as per section 12 of the Act and were tied up grants monitored by the funding agencies. However, it is also seen that the detailed findings that the benefits of the research of the assessee's society was made available to the other two societies without any amounts being charged from them and those societies were as such allowed to commercially exploit, the same have not been discussed or considered in the order of the Tribunal nor the judgement of the Hon'ble High Court since facts need to be re-considered and reconciled with the finding in the light of the judgement of the Hon'ble High Court in assessee's own case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch work for scientific, industrial management and development, identify select, adopt and improve, develop and design appropriate technologies, products and procedures for agriculture, industry, handicrafts, undertake multidisciplinary investigations, provide necessary back up services to the research facilities. However on considering the application of the assessee for its renewal, it was found that the activities were contrary to the Memorandum of Association. Referring to the scrutiny assessment made u/s 143(3) on 30.12.2008 for the 2006-07 assessment year, it was observed that the assessment was concluded at Rs. 17,83,51,220/- as against NIL income shown by the assessee. The reasons for the same were the unspent amount in the balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto, the assessee as per para 4 of the impugned order filed detailed replies stating that the activities of the funding agencies are charitable and were with no profit motives however the reply was not accepted. The DIT(Exemption) was of the view that TARA (Technology and Action for Rural Advancement) page 4 para 6 are not a charitable organization and are doing commercial activities and earning income. Considering the fact that the Chairman of the society had substantial interest in these two commercial entities, it was hold that by extending the benefit of placing fixed deposits of the society for securing loans to carry on commercial activities by the said society was held in violation of section 13(2). 3.1. The DIT(E) further addr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were various Government Bodies. As a result of the actions of the assessee, it was concluded direct benefit has been conferred on these two entities with whom the assessee society had a common Chairman and in return, no benefit accrued to the society being a public body enjoying tax benefit. The results of its research work, it was observed were passed on to the two entities without securing any monetary gain. In regard to the funds received for specific projects, assessee was necessarily required to maintain separate accounts and the results were made available to the other two societies without justifying charitable nature of its activities and why the results were allowed to be commercially utilized by others without charging anything a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing, Ld. AR invited attention to copy of the judgement of the Jurisdictional High Court stating that against the assessment order the relief was granted by the CIT(A) which was confirmed by the ITAT in its order dated 13.01.2012 in ITA No-12/2012 18/2012, copy of the same was filed in DIT vs Society for Development Alternatives, 2012-TIOL-76-HC-DEL-IT. Inviting attention to the same, it was submitted that the departmental appeal was dismissed and reference in the said judgement has been made to pledging of FDR of Rs. 12,00,000/- as collateral security for allowing credit facility to two societies and the fact that the assessee had not utilized the grants and the sum of Rs. 16,92,50,496/- apart from another sum. Inviting attention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two societies and the Chairman was common as such the society does not function as per the requirements of the Act and the registration has rightly been rejected. 6. We have heard the rival submissions and perused the material available on record. It is seen that the DIT(E) while passing the order on 21.01.2011 did not have benefit of the order of the ITAT which order is dated 01.04.2011 for 2006-07 assessment year in ITA No.-1239/Del/2010 139/Del/2011, similarly the benefit of the judgement of the Hon'ble High Court rendered on 13.11.2012 was not available to the DIT(E) considering the consequent contradictions in the orders passed by the DIT(E) and assessment order namely non-maintenance of separate books of accounts which issue has t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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