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TMI Blog2014 (4) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee through a bank account of the assessee, from out of the receipt of donations from various members and others, numbering as many as 128, and as such, it cannot be said that there was any misuse of funds by the assessee. In respect of small amounts of donations received from many as many as 128 persons also, assessee claims to have maintained some record, which was produced before the Director of Income-tax(Exemption). No merit in the observations of the Director of Income-tax(Exemption) with regard to misuse of funds Allahabad High Court in the case of CIT V/s. Red Rose School (2007 (2) TMI 575 - ALLAHABAD HIGH COURT) the scope of enquiry contemplated while granting registration under S.12AA cannot extend to misuse of fund or e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be granted registration under S.12AA of the Act. The Director of Income-tax(Exemption) noted that the object clause 3(e) of the assessee clearly shows the predominant commercial purpose of the assessee institution. He drew further support in this behalf from the reply of the assessee dated 12.4.2013. He further noticed that a donation of ₹ 5,51,000 was given to Chief Minister Relief Fund. From the statement of bank account of the assessee in AP Mahesh Co-op Urban Bank Ltd., it was noticed that a sum of ₹ 4,97,950 was deposited in cash on 13.10.2009. Clarifying such donation, the applicant institution has submitted that they have collected donation from different persons amounting to ₹ 5,33,551. From the list of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verifiable. He also placed reliance on the decision of the Allahabad High Court in the case of CIT V/s. Red Rose School(2007) 212 CTR 0394, duly furnishing a copy thereof before us, that at the stage of granting registration under S.12AA of the Act, scope of enquiry could not be extended to misuse of fund or earning of lprofit that would be taken care of by Ss.11 and 12, while granting exemption under those sections. He therefore, submitted that the Director of Income-tax(Exemption) was not justified in rejecting the application of the assessee for registration underS.12AA of the Act. 5. The Learned Departmental Representative on the contrary, strongly supported the order of the Director of Income-tax(Exemption). 6. We heard both side ..... X X X X Extracts X X X X X X X X Extracts X X X X
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