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TMI Blog2020 (8) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... t recorded a finding that the activities of the Society were not genuine or were not in accordance with the objects of the Society. As per CIT (E) that no activities had been carried out by the assessee society. Therefore, it is our considered opinion that the Ld. CIT (E) has unnecessarily enlarged the scope of the mandate to be exercised by him at the time of grant of registration u/s 12AA. He has gone into an all together different consideration for grant of registration whereas he was only to consider whether the objects and the activities were genuine were not. Thus, the observation of the Ld. CIT (E) that since no activities were carried out, the registration cannot be granted, does not hold good. CIT (E) went on to make an irrelevant observation that the subscription fee of ₹ 3 ₹ 5 to be charged from various categories of members was high and, therefore, the activity of the society could not be considered charitable. We find ourselves unable to be in agreement with the Ld. CIT (E) as this being a valid reason for refusal to grant of registration u/s 12AA. The quantum of fee/subscription only without any other corroborating finding establishing that the activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the same. The Society wanted to construct building/s for the furtherance of its objects after demolition of the old dilapidated building on the site. The Society already held a license in the form of No Objection Certificate (NOC) from the Land and Development Office but there were no building approval plans. The Society requested the New Delhi Municipal Corporation for the same and obtained the building approval plan in the year 2013. Thereafter, the Shriram Group introduced funding to the tune of ₹ 6.59 Crores till the year ended 31st March, 2017. Meanwhile, the Land Development Office and the New Delhi Municipal Corporation cancelled the no objection certificate and the approval for building plans respectively and the Society had to approach the Hon ble Delhi High Court for relief. The Hon ble Delhi High Court directed the Land Development Office and the New Delhi Municipal Corporation to reconsider the assessee s request for no objection certificate and approval of building plans vide order dated 03.06.2016. 2.3 Thereafter, the assessee society filed application in Form No.10A on 27.03.2019 seeking registration u/s 12AA of the Act. The Ld. CIT (E) required the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable activities though the same was created in the year 1941 is contrary to his own finding in para 9 of his order that the appellant society in past few years has not carried out any charitable activities . 5. The CIT (E) failed to appreciate construction of building for use as auditorium, reading room etc., is for the purpose of promotion and development of art and culture and constitutes an integral part of charitable purpose. 6. The CIT (E) failed to appreciate that the alleged non adherence by the Executive Committee/Managing Committee/ Honorary Secretary to certain rules of the society regarding accounts/cessation of membership/cash expenses none of which were fraudulent or serious violations did not militate against the genuine nature of the activities of the appellant society and grant of registration u/s.12A. 7. The CIT (E) over looked the fact that the appellant was registered under the Societies Registration Act 1860 (Act XX1 of 1860) way back in 1941 and the society had its origins prior to that as well, that the society got a plot of land from the Government in November 1934 on perpetual lease and a part of the lands was subleased to Delhi Tamil Education Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 to 2010 was caused by closure and sealing of the building as unsafe and that was only a temporary cessation prior to the new governing body taking over the management in the year 2010 and those deviations, if any, were not valid material for rejecting registration u/s.12A. 15. The CIT (E) erred in concluding that the appellant society is not for public charitable purposes because right of admission to membership is subject to approval by Managing Committee. He erred also in holding the membership fee is high. 16. The CIT (E) failed to appreciate that the appellant society fully satisfied the conditions (i) (ii) mentioned in para 12 of his own order and hence his rejection of the application for grant of registration is untenable. For these and other grounds that may be urged at the time of hearing it is prayed the Appellant Tribunal may be pleased to set aside the order of CIT (E) refusing registration and direct him to grant registration. 3.0 The Ld. Authorized Representative submitted that the Ld. CIT (E) had failed to appreciate that the objectives of the assessee society were charitable in nature. It was submitted that the Ld. CIT (E) had failed to appreciate that a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. CIT-DR supported the order of the Ld. CIT (E) vehemently and submitted that the registration had been rightly refused. 5.0 We have heard the rival submissions and have also perused the material on record. We have also carefully gone through the impugned order. A perusal of the impugned order shows that one of the reason specified by the Ld. CIT (E) for rejecting the assessee s application for registration u/s 12AA of the Act is that since no activities had been undertaken by the society, it was not possible to register it presumably because it was not possible to form satisfaction about whether the activities of the society were genuine, we find that this issue has been settled by the Hon ble Apex Court in the case of Ananda Social Educational Trust vs. CIT vide order dated 19.02.2020 reported in [2020] 114 taxmann.com 693 (SC). The relevant observations of the Hon ble Apex Court are contained in paragraphs 9 to 12 of the said order and the same are being reproduced herein under for a ready reference: 9. Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or registration found to have undertaken activities contrary to the objects of the Trust. 5.1 Undisputedly, in the present case, the Ld. CIT (E) has not recorded a finding that the activities of the Society were not genuine or were not in accordance with the objects of the Society. Rather, it is the observation of the Ld. CIT (E) that no activities had been carried out by the assessee society. Therefore, it is our considered opinion that the Ld. CIT (E) has unnecessarily enlarged the scope of the mandate to be exercised by him at the time of grant of registration u/s 12AA of the Act. He has gone into an all together different consideration for grant of registration whereas he was only to consider whether the objects and the activities were genuine were not. Thus, the observation of the Ld. CIT (E) that since no activities were carried out, the registration cannot be granted, does not hold good. 5.2 We also note that the Ld. CIT (E) went on to make an irrelevant observation that the subscription fee of ₹ 3 ₹ 5 to be charged from various categories of members was high and, therefore, the activity of the society could not be considered charitable. We find ourselves unable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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