2013 (3) TMI 76

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.... being aggrieved by the order of the Director of Income Tax (E) passed under Section 12AA(3) read with Section 12 of the Income Tax Act cancelling the registration granted to the assessee under Section 12(A).  2. The entire case of the revenue was that since the assessee, in the assessment year 2005-2006, had invested in commercial property at Bangalore and it was not for a charitable purpose and further that in thesaid property no educational activity was carried out which was the objectof the assessee. The respondent/assessee had contended that it was permissible for it to invest in immovable property in terms of section 11(5) of the said Act. It was also contended that though the investment was in commercial property, the income ....

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.... (5) The forms and modes of investing or depositing the money referred to in clause (b) of sub-section (2) shall be the following, namely :-  ...... (x) Investment in immovable property. 7.1. Plain reading of provisions of sec. 11 (2)(b) lay down that 85% of the income is to be applied to charitable purposes or set apart and the moneys accumulated or set apart can be invested or deposited in the forms or modes specified in sub-sec.(5). 7.2. Clause (x) of Sub sec. (5) to sec. 11 prescribes one of the modes of investment as "investment in immovable property". Thus, the surplus income can be applied to investment in immovable property. The charitable purposes will include the educational activities and acquiring the income ....