TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 920
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....0G of the Act on 30.11.2000 vide order No.464/35/86 and the same was renewed upto 31.03.2011. During the previous year 2013-14, Ld. CIT observed that the memorandum of association of the assessee society contained a clause to the effect that the assessee society was meant particularly for Nadar community. Subsequently, Ld. CIT requested the Secretary of the society to appear before him with the books of accounts for the assessment years 2011-12 & 2012-13. The Ld.CIT in his order pointed out that, though several opportunities were given to the assessee society, none of the requisite information sought after by the Ld. CIT was produced before him. Therefore, Ld. CIT decided the case on the basis of the materials available on record. The prime objection of the Ld. CIT was that, one of the objects mentioned in the Memorandum of Association of society states:- "(i) to establish and maintain at Virudhunagar, The Virudhunagar S. Vellaichamy Nadar Polytechnic College and to provide therein for the technical and technological education of the youth, of all communities in general and of the Nadar community in particula....
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....still be regarded as a charitable purpose if it is so under the general law. The purpose should be charitable for getting any benefit. Therefore education should be charitable for availing the benefit. Hence the words 'charitable' and 'charity' attain importance. Mere imparting education cannot be a charitable purpose to qualify for any benefit. It is germane to quote the observation of the Hon'ble Judges in the case of CIT v. National Institute of Aeronautical Engg. Educational Society [2009] 315 ITR 428 (Uttarakhand) which is as under: "We are of the view that mere imparting education for primary purpose of earning profits cannot be said to be a charitable activity. We are of the firm view that, in the expression 'charitable purpose', charity is the soul of the expression. Mere trade or commerce in the name of education cannot be said to be a charitable purpose. And the Commissioner of Income Tax has to satisfy himself as provided U/s. 12AA of the Act before allowing the registration." 4.4 It is only the objects of the....
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....le for exemption, the education is to be done through charity. It was never thought in those days that education could turn to be commercial in nature. They could not have imagined that the commercialization was possible in the noble field of education because education itself is a charitable purpose as a matter of legacy from the British and ancient India' 4. Further Ld. CIT observed on perusal of the admission to the first year diploma course for the year 2009-10 that, the assessee society out of its total intake of 590 students, 60 Scheduled castes students were admitted out of the entitled 106 seats, and no Schedules Tribes students were admitted instead of the entitled 6 seats and thus, violated the Government policy. 5. Ld. CIT also placed reliance in the decision of the following cases:- (i) Ld. CIT Vs.Queen's Educational Society and Ld. CIT Vs.St.Pauls Sr.Secondary School 319 ITR 160 [2007] (ii) Aditanar Educational Institution v. Addl. CIT [1997] 224 ITR 310 (iii) Municipal Corporation of Delhi V....
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....ble trust cannot be cancelled, unless and until conditions laid down U/s. 12AA are violated. Sec.12AA (3) stipulates that if the commissioner is satisfied, that the activities of the society are not genuine or not being carried out in accordance with the objects of the society, he shall pass an order in writing for cancelling the registration of the trust. In the present case before us, there is no finding by the Ld. CIT that admission to students for the various courses conducted by the society are only provided for a particular caste. There is also no finding by the Ld. CIT that the activities of the trust/society are not genuine and they are not carried out in accordance with the objects of the trust. Various Hon'ble High Courts have held that if there is some surplus derived from the activities of the institutions that does not mean that the objects of the trust are not charitable. Ld. CIT has also raised adverse inference for advertisements made by the society in the leading newspapers and other Medias in order to attract students. But we do not understand as how this could be the reason for cancellation of registration U/s. 12AA of the Act. Hon'ble High Court of Madra....