TaxTMI 
TaxTMI 
2011 (11) TMI 678
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.... Sept., 2010 and a report was called from the office of CIT-II, Jalandhar, who submitted his report on 16th Sept., 2011 and accordingly, show-cause notice dt. 20th Sept., 2011 was issued to the assessee wherein the following two issues were raised : (a) That the objects of the trust are not exclusively related to education but are partly religious in nature. (b) That payments have been made to the Diocese of Jalandhar without much justifiable cause." The said notice was replied to on 21st Sept., 2011 wherein the assessee submitted the following reply regarding the above two issues : "First and formost it is submitted that our society is imparting education to the public at large without distinction of any caste, creed and religi....
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....intenance of the Roman Catholic Bishop and Clergy of the Diocese of Jalandhar, apart from managing local or parochial funds of churches or parishes. Accordingly, it was held that under s. 10(23C)(vi) of the Act, the institution has to exist solely for educational purposes and exemption is not to be granted if the trust does not exist solely for educational purposes. The judgment of this Court in case of Pinegrove International Charitable Trust & Ors. vs. Union of India & Ors. (2010) 230 CTR (P&;H) 477 : (2010) 37 DTR (P&H) 105 : (2010) 327 ITR 73(P&H) was also relied upon by holding that various principles have to be taken into consideration for deciding the case of the assessee for granting exemption under s. 10(23C)(vi) of the Act and acc....
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.... 5. The assessee in its reply has admitted that the funds have been given to the Diocese of Jalandhar but tried to justify that Diocese of Jalandhar is also engaged in running the schools which are located in different places of Punjab. Respondent No. 3 has examined the memorandum of association of the Diocese of Jalandhar and come to the conclusion that the objects were not totally educational in nature and the objects were religious in nature. A perusal of the said objects would go on to show that the Diocese of Jalandhar had a wide range of objects which included dealing with and managing the movable and immovable properties of all descriptions of the association and to take over and acquire hold, stocks, shares, securities, ....
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....2 defines charitable purposes which includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit in the nature of trade, commerce and business. The unnumbered second proviso to s. 10(23C) goes to show that the prescribed authority is under a statutory liability to satisfy itself for the genuineness of the activities of such institution after examining the audited annual accounts. This power of satisfaction of the prescribed authority for ascertaining the genuineness of the activities has been noted by this Court in Pinegrove International Charitable Trust's case (supra) and the following principles were laid down after n....
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....d the record and rightly come to the conclusion that the income earned by the assessee is not being used solely for educational purposes and genuineness of the activities of the institution has been doubted. That the third proviso to the section contains the expression "applies its income or accumulates it for application, wholly and exclusively to the objects for which it is established, therefore, in the facts and circumstance of the present case the assessee has itself admitted that the funds have been given the Diocese of Jalandhar, therefore, the income of the institution has not been applied execlusively to the objects of the institution. Thus, there is no ground made out to interfere with the well reasoned order of the respondent No.....