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TMI Blog2015 (10) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... in other fine points on this issue but there is no need to go into all those issues as undisputedly, there is no such income on the facts of this case. There may be a possibility of engaging in a commercial activity , with the help of 'community centre' the assessee is building, but this possibility, even if that be so, cannot be reason enough to decline the application for registration under section 80 G. Commissioner's action is a classic example of proceeding on the basis of surmises and conjectures and on the basis of irrelevant considerations. What Commissioner needs to do in such cases is very well elaborated upon in Rule 11 AA reproduced earlier in this order. Learned Commissioner, should, inter alia, examine (i) copy of registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The application was declined by the learned Commissioner on the short ground that since the assessee institution has spent ₹ 49,54,000, for purchase of land and construction of a community hall, the use of such a community hall for commercial purposes cannot be ruled out. Learned Commissioner has also observed that only an amount of ₹ 10,240 has been shown to have been spent on orphanage expenses and the assessee has not produced any evidence of any significant charitable activity. With these observations, having noted that almost entire funds have been used towards construction of 'community hall' and that the applicant does not fulfil conditions laid down in clause (i) to (v) of sub section (5) of Section 80 G, lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) of sub-section (5) of section 80G are fulfilled by the institution or fund, he shall record such satisfaction in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid. (5) Where the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing: Provided that no order of rejection of an application shall be passed without giving the institution or fund an opportunity of being heard. (6) The time-limit, within which the Commissioner shall pass an order either granting the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business; (ii) the instrument under which the institution or fund is constituted- does not, or the rules governing the institution or fund do not, contain any provision for the transfer of application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv) the institution or fund maintains regular accounts of its receipts and exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sections 11 and 12 or clause (22) or clause (22A) or clause (23) or clause (23AA) or clause (23C) of section 10 . There are certain other fine points on this issue but there is no need to go into all those issues as undisputedly, there is no such income on the facts of this case. There may be a possibility of engaging in a commercial activity , with the help of 'community centre' the assessee is building, but this possibility, even if that be so, cannot be reason enough to decline the application for registration under section 80 G. Learned Commissioner's action is a classic example of proceeding on the basis of surmises and conjectures and on the basis of irrelevant considerations. What Commissioner needs to do in such cases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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