AI Drafter 
TaxTMI 
TaxTMI 
2015 (9) TMI 655
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.... on facts in holding that since an amount of Rs. 1.10 crore from anonymous donations used in the construction of college building was surrendered during survey u/s 133A and tax was paid u/s 115BBC of the Act, therefore, the activities of society are neither genuine nor are being carried out in accordance with the objects of the society. 3. BECAUSE the Ld. Commissioner of Income-tax has erred in law and on facts in holding that the funds of the society with reference to imprest money are used for the benefit of the members of the society, therefore, the activities of society are neither genuine nor are being carried out in accordance with the objects of the society'. 4. BECAUSE the Ld. Commissioner of Income-tax has erred in law and on facts in holding that the activities of the society are in the nature of commercial venture with reference to receipts of A.Ys. 2004-05 to 2006-07 and 2011-12 without considering the capital expenditure for school building and the law that proviso to section 2 (15) of the Act with reference to commercial activities does not apply to education and medical relief. 5. BECAUSE the Ld. Commissioner of Income-tax has erred in ....
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....us in A.Y.'s 2007-08 to A.Y. 2009-10, if the amounts capitalized in these year is also considered then, there is a deficit instead of surplus in all the years. Various case laws have been cited in which it has been held that capital expenditure is also regarded as application of income for charitable purpose. This explanation of the assessee does not reveal the full facts. The complete facts are that on going through the application dated 10/04/2007, filed on 11/04/2007 for registration u/s 12A, it is seen that the assessee has enclosed a copy of the amended objects of the society. These objects are amended as on 21/09/2002. Clause 8 of the amended objects reads as follows:- However, on going through the enclosed accounts, it is seen that receipts from students were Rs. 2,17,15,000/- in assessment year 2006-07, Rs. 67,91,250/- in assessment year 2005-06 and Rs. 50,20,000/- in assessment year 2004-05. The receipts in subsequent years are much higher reaching Rs. 6,52,92,104/- in assessment year 2011-12. This proves that the assessee has no intention of running the society on charitable lines as set out in its objects. It is very clear therefore, that t....
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....1, the assessee society has to arrange education and training for dental treatment and to provide information in this regard and to make people aware in this regard and all these have to be done free. As per clause 12 of the amended objects, dental treatment has to be done free of charge. Hence, it is seen that the college and hospital both has to be established and run without any charge. It is not relevant in the present dispute as to whether charging fees for education and treatment is permissible or not. For the purpose of section 12AA(3), what is required to be seen is that as to whether the assessee society is running and carrying out its activities as per its object clause. When the object clause shows that the education and treatment has to be provided free of cost and the assessee society is charging fees for those facilities, it has to be accepted that the assessee society is not being carrying out its activities as per its object clause and once this is found that activities of the assessee society are not being carried out in accordance with the objects of the trust, the CIT shall pass an order in writing cancelling the registration of the assessee society u/s 12AA(3) o....
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....ies of the trust are being carried out in accordance with the objects of the trust or not. Therefore, this Tribunal decision in course of registration u/s 12AA is not rendering any help to the assessee. 8. Regarding the letters of State Government, determining fee structure of private medical colleges and engineering colleges available on page No. 142 to 147, we are of the considered opinion that even this fact that the fees being charged by the assessee society is lesser then the fees structure of the State Government is not rendering any help to the assessee because when as per the object clause of the assessee itself, services of the dental education and treatment are to be provided free of cost, charging any fees results into this that the activities of the assessee society are not being carried out in accordance with the object clause of the assessee society and therefore, this argument of the assessee is also not rendering any help to the assessee. 9. As per above discussion, we have seen that there is no infirmity in the order of learned CIT. We, therefore, decline to interfere in the order of learned CIT. 10. In the result, the appeal of the assessee stands dismiss....