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TMI Blog2017 (3) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration is restore to the file of the ld. CIT(E). - Appeals of the assessees are allowed for statistical purposes only. - ITA No. 185 & 186/JP/2016, ITA No. 187 & 188/JP/2016, ITA No. 189 & 190/JP/2016 - - - Dated:- 3-3-2017 - Shri Bhagchand, AM And Shri Kul Bharat, JM Assessee by : Shri Rajiv Sogani Shri Rohan Sogani (CA) Revenue by : Shri Varinder Mehta (CIT) ORDER Per Bhagchand, A. M. This is a bunch of six appeals filed by three different assessees/societies against the six separate orders all dated 29/12/2015 passed by the ld. CIT(E), Jaipur for not granting the registration U/s 12AA 80G(5) of the Income Tax Act, 1961 (in short the Act). 2. Since two common issues are raised in these appeals, therefore, the same are heard together and for the sake of convenience and brevity, a common order is being passed. 3. In these appeals, the assessees have raised following grounds:- Grounds of ITA No. 185/JP/2016 1. In the facts and circumstances of the case and in law, the ld. CIT(E), Jaipur has erred in rejecting the application for registration U/s 12AA as this is bad in law and liable to be quashed. 2. The ld. CIT(E), Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit through these groups is limited to members of the group and not to be public at large. Thus in this way it works as a mutual benefit society for few members only. He also held that the charity demands that benefit should flow to the public at large, while the mutuality is for the persons restricted within the group. It can be said that charity and mutuality are mutually exclusive and they cannot be stay together. As the activity of the assessee falls under mutuality, it cannot simultaneously claim benefit under charity. Therefore, the ld. CIT(E) rejected the application for registration U/s 12AA of the Act. The ld. CIT(E) also held that once the registration U/s 12AA of the Act has been rejected, then the society is not eligible for exemption U/s 80G of the Act. Therefore, he also rejected the applications for seeking exemption U/s 80G of the Act. 5. Now the assessee is appeals before us. The AR of the assessee regarding all the appeals has submitted as under:- 1.1.i The appellant trusts are involved in charitable activities by way of relief of the poor and also education. Relief of poor is achieved by providing support to poor women in different SHGs in terms of help ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic empowerment of the women by providing micro-finance to them through SHGs. The appellant trusts through the recognized scheme of NABARD and in association with YES Bank arrange micro-finance to the women of the economically weaker section of the society. No bank provides loans to any of the SHGs unless they have worked for 6 months and demonstrates disciplined functioning of borrowings and repayment through savings. Therefore, the appellant trusts provides initial finance for six months and also hand holds the SHGs for inculcating financial discipline and understanding in the members. During this period interest is charged at the same rate at which banks would provide micro-finance to these SHGs after six months. Thus there is no element of profit. Charging of interest is necessary to teach the SHG members, the concept of borrowings at interest for their economic advancement. Further, the poor women in villages pay high interest of 36% to 60% when they are not members of SHGs. 1.2.ii The rejection of the application on the allegation of profit element is baseless. Ld. CIT(E) has not appreciated the facts in correct perspective. The appellant trusts provide various agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loitation cannot stand. The Tribunal found that this activity was recognized as charitable for the past four years in assessee s case by inferring that giving loan at reasonable interest to poor women, who had otherwise no access for such credit, is to be accepted as a charitable activity, as such activity can uplift the economic status of such women. There was nothing to suggest that they could have obtained a cheaper loan. It is in this view, right to exemption and renewal of recognition under section 80G was held to be justified by the Hon ble ITAT Bangalore Bench. 4. It is also brought to the notice of the Hon ble Bench that following trusts having identical objects and functioning have been granted registration under section 12AA. Details are as under: Name of the Trust : Sangharsh Mahila Manch Particulars Paper Book-II KMM CMM JMM Trust Deed 40-47 30-37 22-29 12A Registration certificate 48 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32, wherein the Hon'ble Supreme Court has held that where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit. The ld. AR also relied on the decision of Hon'ble Supreme Court in the case of Queen s Educational Society (2015) 275 CTR 449 (SC). The ld. AR also relied on the decision of Bangalore ITAT in the case of ADIT (E) Vs. Bharatha Swamukhi Samsthe (2009) 319 ITR (AT) 422 in ITA No. 1121/Bang/2008, wherein the Coordinate Bench of the Bangalore ITAT has held that object of the assessee was alleviation of poverty by extending micro credits to poor rural women and it was not charging exorbitant interest and there being nothing to suggest that funds were used or misused for personal benefit of the trustees, it was entitled to renewal of recognition U/s 80G(5) of the Act. the ld AR also relied on the decision of the Jaipur ITAT in the case of Abhibhashak Pension Sahyog Samiti, Alwar Vs. CIT(E), Jaipur in ITA No. 632/JP/2015 order dated 08/08/2016, wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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