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TMI Blog2016 (2) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... report and the application filed by the society, observed that for the FY 2010-11 the assessee society had received corpus donation of Rs. 7.21 lacs in cash out of which an amount of Rs. 3.882 lacs had been received from various persons who were residents of 61, Geeta Colony, Dal Bazaar, Gwalior during the period 26/04/2010 to 08/05/2010. The genuineness of corpus donation was doubted by the Ld. CIT and opportunity was forwarded to the assessee to justify the genuineness of its charitable activities. Written submissions were filed by the assessee society, after considering which, the Ld. CIT held that the genuineness of the charitable activity carried out by the society had not been established in the absence of production of books of account, bills, vouchers and supporting relevant documentary evidences and also the genuineness of the corpus donation of Rs. 7.21 lacs and therefore registration under section 12AA was refused to be granted to the assessee society. 4. Aggrieved by the same the assessee filed the present appeal before us . 5. Before us the Ld. AR submitted that one of the reason for refusing registration under section 12AA, was the non production of books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the year 2008 and had also started one pre primary school in the name of Pearls Valley School from the year 2010. Ld. AR submitted that audited Receipt and Payment account , Income & Expenditure account and Balance Sheets of the assessee society and the above two educational institutes being run by it, were submitted before the ACIT / CIT which clearly proved that the assessee was genuinely conducting its charitable activity also. Ld. AR stated that no infirmity had been found in the financial statements submitted before the Ld. CIT. Ld. AR therefore submitted that there is no case for refusing to grant registration to the assessee society under section 12AA of the Act, since its objects were genuine and also the activities carried out by it. Ld. AR further drew our attention to the communication of the ACIT who had conducted an enquiry u/s 12AA, on the activities carried out by the assessee society, addressed to the Ld. CIT recommending the grant of registration to the assessee society u/s 12AA. Ld. AR further drew our attention to the Inspectors enquiry report attached with the aforementioned letter to the Ld.CIT, which was a report of the Inspector who had visited the premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the letter placed at PB Page No. 64. Therefore the grievance of the Ld. CIT that books of account were not produced before it is unfounded and cannot be the basis for formation of belief of that activity of the assessee society were not genuine. 10. Ld. CIT we find has also refused registration, since the assessee society could not establish the genuineness of the corpus donation received by it amounting to Rs. 7.21 Lacs. 11. As far as this issue is concerned, we find that the same cannot be a consideration before granting / refusing registration u/s 12AA. The scope of enquiry of the Commissioner as stated above, is limited to looking into only the genuineness of the objects and activities of the Trust / Institution. Genuineness of the activities means they are in consonance with the objects of the Trust / Institution and are real, pure and sincere and not a mere camouflage. The Hon'ble Allahabad High Court has dealt with the scope of enquiry to be conducted by the commissioner while granting registration u/s 12AA in the case of CIT Vs. Red Rose School (2007) 212 CTR 394 where in it has held as under: A reading of provisions of sub-cls. (a) and (b) of s. 12AA makes it clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its charitable activities, may be a ground for refusing exemption only with respect to that part of the income but cannot be taken to be a synonym to the genuineness of the activities of the trust or the institution. It is significant to mention that registration under s. 12AA does not necessarily entitle the assessee to get the income excluded from the income of the previous year for the purpose of determination of tax liability but it only entitles the assessee to claim such exemption, which otherwise could not be claimed in the absence of registration. The enquiry by the CIT shall remain restricted to the examination, as to whether the assessee, who has moved the application for registration under s. 12A, is actually in the activities which are genuine. Genuineness of the activities of the trust or the institution has to be seen, keeping in mind the objects thereof, which necessarily means that the CIT shall satisfy himself about the fact that the activities are genuine and in consonance with the objects of the trust or the institution. In other words, if establishing and running a school is the object of the society, as given in its bye-laws, it has to be satisfied that the soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned year. In the year ending 31/03/2011, the assessee had started another school going by the name of Pearl Valley School and commenced educational activity in the same also showing excess of expenditure over income of Rs. 1,85,585/- with assets of Rs. 5,54,425/-. Besides educational activity were being carried on in the Royal College of Education & Research Centre also and in the year ending 31.03.2011 there was excess of income over expenditure of Rs. 36,464/- and the WDV of assets totalled at Rs. 1,83,382/-. From the above facts it is amply clear that one of the main object of the assessee society was carrying educational activities which is clearly a charitable activity as defined u/s 2(15) of the Income Tax Act. Further in pursuance of its main object the assessee was conducting the activity of imparting education in the two institutes established by it being Royal College of Education & Research Centre & Pearl Valley School. We find that these documents were there before the Ld. CIT who found no infirmity in the same. Therefore it can be safely concluded that the activities of the assessee society were charitable and were being genuinely carried out by it. 13. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty also clearly stated that the activity were in the nature of imparting education. The inspectiors report is being reproduced here under: Inspection Enquiry Report As directed I visited office premises of Chetanya Shiksh Evam Vikas Parishad situated at 61. Geeta Colony, Dal Bazar, Gwalior on 14th Dec 2012. Shri Amit Pahariya, Secretary of the above Parishad was found available about the activities of Parishad Shri Amit Pahariya, Secretary stated that the Parishad is running Royal College of education & research Centre for B.Ed/D.Ed course located at Sitholi, Dabara Road Gwalior and also running one Pre-Primary Schoool in named Pearl Velly School located at Geeta Colony, Dal Bazar, Gwalior for genuineness of activities I also visited College & School with Shri Amit Pahariya, Secretary of the Parishad. I asked about the activities of the Parishad the main object of the Parishad running College & School, Gwalior. The Society is presently engaged in imparting education at higher level by running course of B.Ed/D.Ed at Royal college of education & research Centre for B.Ed/D.Ed and Pre-Primary School in named Pearl Velly School. Objects of the Society also include development of chil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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