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TMI Blog2019 (5) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... his powers u/s 12AA(3), in case if the activities of the assessee society are at any stage found by him as not being carried out in accordance with its aims and objects. CIT(E) as per the mandate of law, at the stage of considering the application of the assessee society for grant of registration u/s 12AA was supposed to confine himself to two aspects viz. (i) examination of objects of the society or institution; and (ii) satisfaction of the registering authority about the genuineness of the activities of the society or institution on the basis of inquiries. As observed by us hereinabove, it was not correct on the part of the CIT(E) to have rejected the application filed by the assessee society for grant of registration u/s 12AA for the reason that the activities envisaged in the aims and objects had not been carried out by the assessee society, which as observed by us hereinabove was in its nascent stage. We thus in all fairness restore the matter to the file of the CIT(E), who shall dispose off the application filed by the assessee by confining himself to two aspects viz. (i) examination of objects of the society or institution; and (ii) satisfaction about the genuineness of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o apply the income for the fulfilment of object and not to pay any portion thereof by way of profit or dividend or bonus; and to do all such lawful acts, needs and things incidental to the attainment of its objects. 3. The CIT(E) in order to verify the activities and therein confirm as to whether the same were in accord with its stated objects, directed the assessee to furnish certain details/clarifications. On the basis of reply submitted by the assessee and after perusing the documents available on record, the CIT(E) called upon the assessee to provide the rationale as to why the registration should be granted in the absence of any apparent charitable activity being pursued along with evidence thereof. In the backdrop of the reply filed by the assessee, it was observed by the CIT(E) that admittedly no activity had yet been carried out towards the aims and objects of the assessee society. Apart therefrom, it was noticed by him that the financial statements filed by the assessee society also did not reveal any expenditure in the nature of charitable purpose . Rather, it was observed by the CIT(E) that the only expenditure shown by the assessee was towards payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A seeking registration under Sec. 12A of the IT Act on 17.04.2017. It was submitted by the Ld. A.R that the CIT(E) instead of confining himself to the examination of the objects of the society and the genuineness of its activities at the stage of considering the application of the assessee society for grant of registration under Sec. 12AA of the IT Act, had however traversed beyond the scope of his jurisdiction and had declined the registration for the reason that the assessee society had not conducted any activities. It was submitted by the Ld. A.R that as the assessee society was in the nascent stage, hence for the said reason no activities were carried out towards the aims and objects of the society. It was submitted by the Ld. A.R that as the aims and objects of the assessee society were to set up, run and maintain dispensaries and hospitals for the general public irrespective of caste or creed and to do all such activities for the furtherance of the said object, hence it was established for a charitable purpose of providing medical relief. It was averred by the Ld. A.R that the CIT(E) had erred in law and facts of the case in declining the registration under Sec. 12A of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution made under clause : ( a) [or clause (aa) of sub-section (1)] of section 12A shall:- M/s Anand Isher Amar Charitable Cancer Multi Specialty Hospital Vs.CIT(Exemptions) ( a) Call for such documents or information from the society or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the society or institution and may also such inquiries as he may deem necessary in this behalf; and ( b) After satisfying himself about the objects of the society or institution and the genuineness of its activities, he :- ( i) Shall pass an order in writing registering the society or institution; ( ii) Shall, if he is not so satisfied, pass an order in writing refusing to register the society or institution........ The aforesaid provisions mandates examination of two basic conditions for grant of registration to an assessee under Sec. 12AA viz. (i) examination of objects of the society or institution; and (ii) satisfaction of the registering authority about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Hon ble High Court of Jurisdiction, we are of the considered view that the view taken by the CIT(E) that the envisaged activities of setting up a multispeciality hospital by the assessee society may turn out to be a commercial activity with no element of medical relief whatsoever, is an aspect which has to be looked into by the assessing officer at the stage when the assessee filed its return of income and also by the commissioner for cancelling the registration in exercise of his powers under sub-section (3) to Sec. 12AA of the IT Act, in case if the activities of the assessee society are at any stage found by him as not being carried out in accordance with its aims and objects. Be that as it may, we are of the considered view that the CIT(E) as per the mandate of law, at the stage of considering the application of the assessee M/s Anand Isher Amar Charitable Cancer Multi Specialty Hospital Vs.CIT(Exemptions) society for grant of registration under Sec. 12AA of the IT Act was supposed to confine himself to two aspects viz. (i) examination of objects of the society or institution; and (ii) satisfaction of the registering authority about the genuineness of the activit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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