2011 (7) TMI 764

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....irst time before the appropriate authority, it was rejected on the ground that selling of books, hiring of utensils and buying of properties and letting them for rental etc. etc. cannot be considered as charitable activities. The decision of the appropriate authority was challenged before the Tribunal. The Tribunal allowed the appeal of the assessee and directed the authority to grant registration under sec. 12AA. This order of the Tribunal was challenged before the Hon'ble Jurisdictional High Court. The Hon'ble High Court of Madras has set aside the order of the Tribunal and remitted back the matter to the Director of Income-tax (Exemptions) at Chennai for fresh disposal of the application on merits. 3. In pursuance of the directions is....

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....he assessee had no occasion to explain before the said authority the factual aspects of the case, so that the versions of the assessee could be favourably considered by the said authority. 7. Shri K.E.B. Rengarajan, the learned Junior Standing Counsel appearing for the Revenue, on the other hand, contended that it is for the second round that the matter has come before the Director of Income-tax (Exemptions) and he had given ample opportunities to the assessee to present its case before him with figures, facts and details. In spite of that, the assessee has not appeared before the Director of Income-tax (Exemptions) and he has no other go but to conclude the proceedings an ex parte basis. De hors the above, the learned counsel further ex....

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....essee trust is to run educational institution and the assessee has been carrying on that activity alone, the construction of buildings and purchase of property, cannot be treated as a point against the assessee. The assessee may be purchasing properties and constructing buildings for the purpose of letting out to earn income necessary for carrying on the charitable activity in the nature of running the schools and hostels. In that way, if the entire activities carried on by the assessee are charitable in nature, the expenses incurred for construction of buildings and purchase of assets also qualify to be considered as application of funds for charitable purposes. 9. The discussions made by the Director of Income-tax (Exemptions) do not b....