TaxTMI 
TaxTMI 
2013 (12) TMI 422
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....ted 30.12.2003 passed by the Income Tax Appellate Tribunal in I.T.A.No.891/Luc/2002. The assessee-respondent, namely, St. Don Bosco Educational Society, Lucknow, is a Society registered under the Societies Registration Act, 1961 with an object to impart education to persons in India or any part thereof, irrespective of caste, creed, religion or community. The Society shall be solely for educational purposes and not for the purpose of profit. In furtherance of the aforesaid object, the Society has established educational institutions and has further moved an application for grant of exemption under Section 10 (22) of the Income-tax Act, 1961 [hereinafter referred to as the "Act"] which was processed and exemption was granted. On omission ....
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....e appellant has preferred the instant appeal inter alia on the grounds that Section 12 AA of the Act empowered the Commissioner Income Tax to examine the genuineness of activities of the Trust and also examine as to whether the Society is a charitable institution and its activities are within the purview of Section 2 (15) of the Act or not but the Tribunal has not understood the scheme of the Act into its perspective insofar as there are clear findings in the order of Commissioner of Income Tax that activities during preceding three years are embedded with profit motive and are, therefore, not charitable. While entertaining the instant appeal, this Court, vide order dated 5.7.2004, admitted the appeal on the following substantial questio....
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.... be allowed registration because upto A.Y. 2001-2002 as its claim was found covered under section 10(22)/10(23)(c) of the Income Tax Act, 1961 and it was found to be working not for profit which is contrary to the findings of Commissioner of Income Tax in Para 5.3 of his order that Society is being run on commercial lines for the financial years 1998-99, 99-2000 & 2000-01 ?" In order to answer the question raised in the instant appeal, it would be appropriate to deal with the provisions of Section 12AA of the Income Tax Act, which reads as under: "12AA. Procedure for registration: (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) of sub-section (1) of ....
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....on is prescribed under Section 12AA of the Act. In terms of Clause (a) of Section 12AA of the Act, the Commissioner is to satisfy himself about the genuineness of the activities of the Trust on such inquiries as he may deem necessary. Sub-section (1A) and (2) of Section 12AA of the Act, are procedural in nature, whereas Sub-section (3) of Section 12AA of the Act, empowers the Commissioner to cancel the registration of the Trust or Institution, if he is satisfied that the activities of such Trust or Institution are not genuine or are not carried out in accordance with the objects of the Trust or Institution. Section 11 of the Act contemplates that the income as specified therein shall not be included in the total income of the previous ye....
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....pplication for registration is required to be made within one year of the creation of the Trust. Section 12AA of the Act, requires satisfaction in respect of the genuineness of the activities of the Trust, which includes the activities which the Trust is undertaking at present and also which it may contemplate to undertake. The insertion of sub-section (3) to Section 12AA of the Act, clarifies the said fact, when it empowers the Commissioner to cancel the registration if the activities of the Trust are not carried out in accordance with such objects. Therefore, the object of Section 12AA of the Act, is to examine the genuineness of the objects of the Trust, but not the income of the Trust for charitable or religious purposes. The stage f....