TaxTMI 
TaxTMI 
2010 (9) TMI 1099
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....r the Societies Registration Act, 1860. The main objective of the society as per the memorandum of association is to promote the research, development and popularization of non-conventional and renewable sources of energy and thereby to deal with the problems caused on account of the rapid depletion of non-renewable energy sources. The members of the society comprise of people drawn from the Government of Himachal Pradesh, either as ex officio by virtue of offices held in the State Government or other employees/representatives of the State Government, and also include a representative of the Department of Non-Conventional Energy Sources, Government of India. In this background the assessee had applied for registration under s. 12AA on 9th June, 2008 with the CIT. By virtue of s. 12AA(2) of the Act, the CIT was required to pass an order granting or refusing registration before the expiry of six months from the end of the month in which the application was received by him. No such order was passed within the prescribed period, therefore, the registration was deemed to have been granted as confirmed by a letter dt. 22nd May, 2009 issued by the CIT. Almost simultaneously on 25th May, 2....
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....vernment. In this connection, a reference was invited to a letter dt. 1st Jan., 2010 issued by Special Secretary (Power) to the Government of Himachal Pradesh, which is placed on record. On this basis it is contended that the amended definition of "charitable purpose" in s. 2(15) does not disentitle the activities of the assessee from being termed as charitable. It is further contended that the activities of the assessee are neither ingenuine nor in violation of the objectives for which it has been set up by the State Government. A reference was made to the written submission filed before the CIT and other material which has been placed in the paper book filed before us. 4. On the other hand, learned Departmental Representative vehemently defended the order of the CIT withdrawing registration under s. 12AA(3) of the Act. According to the learned Departmental Representative, the discussion made by the CIT in paras 5 to 5.5 of the impugned order clearly establishes that the activities carried out by the assessee are not in accordance with its objectives. Therefore, the said aspect satisfies the requirement of s. 12AA(3) of the Act. Further, it is submitted by the learned Departmenta....
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....T is empowered to invoke s. 12AA(3) of the Act on being satisfied about either of the two ingredients mentioned therein. Proviso below sub-s. (3) of s. 12AA of the Act further prescribes that no order cancelling the registration shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. 8. In view of aforesaid discussion, it is evident that the power of the CIT to cancel the registration is not unfettered. It is circumscribed by the conditions prescribed in s. 12AA(3) of the Act. It is also clear that such power does not permit wholesale review of the ingredients which have been considered by the CIT while granting registration under s. 12AA of the Act. To illustrate, we may point out that at the time of evaluating the application of registration under s. 12AA(1) of the Act, the CIT is to satisfy himself on two conditions i.e., that the activities are genuine and, that the objects of the applicant fall within the meaning of "charitable purpose" as per s. 2(15) of the Act. In contrast, at the time of cancelling of registration under s. 12AA(3) of the Act, the CIT has to satisfy himself about either of the two conditions prescribed there....
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....order the CIT has noticed the activities being carried by the assessee over the years, which are as under:- "(a) Various energy saving devices like solar cookers, photo voltaic lamps etc. are provided at subsidized prices to various persons resident in the State, who are identified under different rural development programmes such as the IRDP. The subsidy involved is met from grants received from the Government. (b) Photo-voltaic street lights are provided in various remote localities under special component plans and other special plans of the Central and State Governments. Such lights are also provided in some other places at subsidized rates. (c) Portable micro-hydel generator sets are set up in certain remote areas of the State under specific schemes of the Central Government and nominal user charges are recovered from the beneficiaries. (d) The agency also acts as a nodal agency of the State Government for harnessing small hydro potential upto 5ME capacity, by itself and through private sector participation. The brochure brought out by the agency in this regard, which is sold at a price, states that such projects are being implemented under UNDP and other program....
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....ion in para 5.2 of the impugned order. We have carefully examined the same. In our considered opinion the CIT has misdirected himself in reaching to the aforesaid conclusion. As per the CIT, none of the activities involved an element of research. According to him, all the activities to be undertaken by the assessee, including development and popularization of the non-conventional and renewable source of energy, ought to be preceded by an element of research and it is only then, it shall be regarded to be in accordance with the objects of the appellant society. The reason advanced by the CIT is that the expression "research, development and popularization" appearing in the object clause of the assessee's memorandum of association is to be read together. According to the CIT, 'research' means exploration of new areas of knowledge, which is thereafter developed and popularized. According to him, the activities of the assessee do not involve 'research'. In our view the CIT has erred in understanding and interpreting the contents of the memorandum of association as if it was a statute. The assessee has been set up under the aegis of the Government of Himachal Pradesh....
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.... of brouchers, processing fee, security deposits, upfront premium, etc. The assessee is incurring expenditures out of such receipts. Whether or not such activities are as per its objects is required to be analyzed in the context of the objectives and functions formulated in the memorandum of association and the rules and regulations of the appellant society, a copy of which has been placed in the paper book at pp. 29 to 49. The functions of the society are listed at points 1 to 17 in cl. 2(b) of the memorandum of association, which are partly listed out by the CIT also in para 4.2 of his order. A perusal of the same reveals that the appellant society is expected to identify, formulate proposals and set up units (including demonstration projects) of non-conventional and renewable energy requirements of remote villages and other selective habitation centres. The society is also empowered to sponsor, co-ordinate or promote research programmes of developmental nature in the areas of new sources of alternate energy. As per sub-cl. (7), the society is empowered to advise the State Government, other local bodies and interested parties on all such matters pertaining to alternate energy res....