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TMI Blog2019 (12) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby rejecting registration application u/s 12A of the Act, without appreciating the various contentions of the appellant and also the facts of the case in right perspective. Thus the order so passed deserves to be quashed and registration deserves to be allowed to the appellant trust." 2. Briefly the facts of the case are that the assessee society has moved an application for seeking registration U/s 12AA of the Act on 15.01.2019 before the ld CIT(E). Thereafter after seeking necessary information and documentation, the ld. CIT(E) has held that the activities of the assesse-society are not charitable in nature and therefore, registration U/s 12AA of the Act was rejected. Against the said order, the assessee society is in appeal before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails, documents & photographs etc. were produced along with 'Receipt and Expenditure A/c' etc. Having examined such details of receipts and expenditure and other documents, the ld. CIT(E) appeared to be satisfied about the objects of the society being of 'charitable nature of these activities', except the alleged activity of hiring Dharamshalla, Parks & Utensils etc. on rent. The ld. CIT (Exemption) was of the view that hiring of Dharmshalla, Parks and Utensils etc. on rent were `commercial activities' in nature and were hit by section 2(15) of the Act after amendment w.e.f. 1.4.2016. Accordingly, the registration application u/s 12AA of the Act was rejected vide order u/s 12AA(1)(b) of the Act dated 31.7.2019. 5. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-16, the Society had more expenditure than receipts by Rs. 8,784/, thus no `income' was earned by the Society during this year. Again, in next two years also i.e. in F.Y. 206-17 & 2017-18, there were nominal surplus of Rs. 9,297/- & Rs. 43,194/- respectively which included the receipts of Rs. 75,000/- & Rs. 1,53,000/- from interest and donations as evident from the Receipt and Expenditure A/c. Thus in these years, 'no' income was earned from hiring of Dharamshalla, Parks and Utensils etc. as alleged by the Id. CIT(E). Accordingly, the ld. CIT (E) had incorrectly worked out the 'Income' of the Society at 73.80%, 80.15% & 74.18% of the receipts and had rejected the application on the basis of incorrect working of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of registration under section 12A of the Act, the ld. CIT(E) is supposed to examine only genuineness of the Trust and its objects. It is not appropriate on the part of the Commissioner to examine the aspect of application of income at the stage of granting registration under section 12AA, which is to be examined by the Assessing Officer on a year to year basis at the time of claiming exemption under section 11 of the Act. At the time of grant of registration, the jurisdiction of the Id. CIT (E) is restricted to verify the genuineness of the Society and to ascertain as to whether the objects of assessee are charitable or not. For the purpose, reliance was placed on the decisions in case of CIT vs. D.P.R. Charitable Trust (2011) 61 ITR (M.P) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the activities of the assessee society are not charitable in nature as its predominantly carried out activities of providing parks/building, satsang bhawan, utensils on rent/commission. 8. We have heard the rival contentions and perused the material available on record. The assessee society is an existing society registered under the Society registration Act since 01.10.2015 and thereafter it has moved an application before the ld. CIT(E) on 15.01.2019 seeking registration u/s 12AA of the Act. Therefore, being an existing and running society at the time of moving an application, the ld. CIT(E) was well within his jurisdiction to examine not just its objects of the assessee society but also the fact that the activities of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld CIT(E). Further, the ld. AR has submitted that the predominant activity of the assessee-society is not hiring of the premises rather predominant activities of the assessee-society are holding of eye camps, yoga classes, celebration of festivals like Dushshera, Holi, Chetichand etc. and the receipts arising out of the hiring of premises are incidental receipts and the same are used for advancement of its main objectives. We prima facie find force in the arguments of the ld AR. The predominant activities where so carried out by the assessee society as so claimed will not necessarily result in any receipts, rather the assessee society has to incur expenses towards carrying out such activities and in order to fund such activities, where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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