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TMI Blog2010 (11) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational Society was registered much earlier i.e., 3-12-1973 under the Karnataka Societies Registration Act. According to the assessee they are conduction social education and cultural activities and in the said process have established medical college, dental college apart from nursing college in and around, Bangalore. The above said application came to be considered by the Director of Income Tax Act (Exemption Bangalore and after considering the returns filed by the assessee and details furnished by order dated 28.6.2002 rejected the application filed by the assessee for registration u/s 12A of the Act. The adjudicating authority found that M/s Ananda Social and Education Association had not obtained registration u/s 12A of the Act before transferring its assets and liabilities to the present trust. It was also found that it has not taken and approval of the commissioner for effecting the said transfer. The adjudicating authority on examination of the material produced before it, found that donations were received regularly and it was shown as hundi credits and therefore, it violates section 11A(I)(d) of he Act. It was found by the authority that institution was making profit b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was justified. He would also contend that order of the Director (Exemption) clearly indicates that assessee was not filing the returns regularly and there was embezzlement of amounts pertaining to the trust in question, Books of Account were not produced and assessee was a profit making institution rather than conducting any charity work as claimed by them. Therefore, there was not compliance of Section 11, 12 and 13 of the Act. Hence it is contended the order of the tribunal is erroneous. It is contended that Tribunal has ignored the detailed discussion made by the Director (Exemption) while refusing registration In support of his submission he relies upon the judgment of the Hon ble Apex Court in the case of CIT, Bangalore Vs Baldwin Girls High School in SLP No. 4173/2009 disposed of on 28-10-2010. 7.Per contra, learned counsel for the respondent-assessee contends that right from 1980 assesse had the benefit of exemption under Section 80G and merely There is delay in filling application or filing of wrong application would not come in the way of granting registration under Section 12A of the Act and according to him the statement of Mr. P. L. Nanjundaswamy, then chairman of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall pass an order in writing registration the Trust or institution; (j) shall, if he is not so satisfied, pass an order in writing refusing to register the the trust or institution. And a copy of such order shall be sent to the applicant; Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which on order has been passed under clause (b) of sub-section (1) before the 1 st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day,) 2. Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) of section 12A] 3. Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the commissioner is satisfied that the activities of such trust or institution are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e organisation or for the benefit of any particular member of members, which applied for considering the case of the applicant for exemption under Section 10(22) of the Ac. This observation was with reference to the transaction of the year when Section 10(22) of the Act was still in the statute. Now we are concerned with a situation in 2002 when Section 10 (22) itself was deleted from the enactment. Therefore when Section 10(22) itself was deleted w.e.f. 1-4-1999, the claim of the respondent-assessee that its predominant object is to propagate education will be of no avail to the respondent. Then observation of the Tribunal that there was all the material available before the Director (Exemption) for consideration of the matter would also be incorrect since as seen from the findings of the Director [Exemption] vide his order dated 28-6-2002 at paragraphs 12 and 13. 10. We find that Director (Exemption) has held that true accounts are not being maintained by assessee and even such of those accounts maintained had not been produced. The entire order goes to show that several opportunities were given to the respondent institution to produce the entire material before the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector (Exemption) that, in the previous year they did divert their funds mainly for the purpose of charity in order to get registration. It the object of the Trust would indicate that it is also meant for charity purpose, unless the charity activity is carried on with the income of the Trust such benefit cannot be availed by them. Therefore, the criteria would be what activity was conducted by the institution in the previous year, whether such activity would amount to charity work or any other work. There from the material available on record the Director (Exemption) was able to find out that not such charitable activity was carried on by the assessee and on the other hand the receipt of donation against Hundi credits was by way of donation from students and it was nothing but a profit making institution. He also finds that there was violation of Section 13 of the Act and there was not promptness on the part of the assessee in furnishing that details sought for by the Director (Exemption) at relevant point of time. All these facts persuaded the Director of (Exemption) to reject the application filed by the respondent institution Tribunal instead of looking in to these grounds on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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