TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 51
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....s the genuineness of the activities could not be established. He, accordingly, denied the benefit of registration to the assessee society. 3. Aggrieved, the assessee society is in appeal before us. The assessee has taken as many as 10 grounds of appeal which are as under:- "1. That the learned Commissioner of Income Tax (Exemptions), Lucknow has grossly erred both on facts and in law in refusing to grant registration to the appellant society under section 12AA(1)(b)(ii) of the Income Tax Act, 1961 vide an order dated 31.03.2015. 2. That the learned Commissioner of Income Tax (Exemptions) has grossly erred in failing to appreciate that objects of the appellant society is wholly charitable in nature and the assessee trust is existing wholly for charitable and religious purposes as such, the appellant society was entitled to the grant of registration under section 12A of the Income Tax Act. 3. That the learned Commissioner of Income Tax (Exemptions) has failed to comprehend that, the assessee is an educational welfare society and was also duly registered under the Societies Registration Act. 4. That the finding of the learned Commissioner of Income Tax (Exemptions) in the ....
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....ions) be directed to grant registration as there was no material to establish that the objects of the appellant society were not charitable." 4. The Ld. AR submitted that the Ld. CIT(E) had failed to appreciate that the objects of the society were charitable and drew our attention to page 4 of the paper book which contains the Memorandum and spells out the objects of the society. He pointed out that even as per the submissions made before the Ld. CIT(E), the society, since its inception, was in the process of establishing an educational institution in the backward city of Bilsi under the name and style of 'Baba International School'. He also submitted that the society had also organised a program to distribute blankets to the poor in winters which is duly evidenced by photographs and newspaper cuttings. He also submitted that the society had organised workshops in Sahaswan, Wazirganj & Ughaiti of Budaun District (remote areas of Budaun district) to develop singing, dance and fine arts among children. These activities were also duly evidenced through photographs and newspaper cuttings and were submitted before the Ld. CIT (Exemptions). 5. Ld. AR also submitted that till 9.3.2015,....
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....no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard." 8. It is seen that Section 12AA confers power on the CIT, while considering the application for registration of trust or institution, to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of the activities of the trust or institution and also to make such enquiries as he may deem necessary in this behalf and, after satisfying himself about objects of the trust or institution and the genuineness of its activities, he shall pass an order in writing, registering the trust or institution. If he is not satisfied, he would refuse the registration. In our view, while considering the issue of registration under section 12AA, the scope of enquiry of the Commissioner would be limited to the aforesaid extent. On the facts of the case, it is seen that this is the first year of the assessee society and at the time of filing of application for registration, there were no substantial activities. The Ld. CIT (Exemptions) drew adverse inference on inactivity which was not germane at t....
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....rtaken activities in furtherance of its object as per the Memorandum of Association. Furthermore, at the stage of granting registration u/s 12A of the Act, the DIT(E) has to satisfy himself about the objects of the institution and genuineness of the activities. He is not required to look into the utilization of fund, commercial nature of activity etc. at this stage. These aspects can be looked into by the AO at the time of assessment. As per the scheme of the Act, registration u/s 12A of the Act does not, ipso-facto, entitle an assessee to avail exemption u/s 11 of the Act. For availing exemption u/s 11, the assessee has to fulfill the conditions laid down u/s 11 to 13 of the Act. Therefore, whether the assessee is entitled for exemption u/s 11 of the Act or not can only be looked into at the stage of assessment. DIT(E) at the time of grant of registration u/s 12A cannot step into the shoes of the AO to examine whether the assessee has carried out any activity with profit motive or there is violation of conditions laid down u/s 11 of the Act. From the order of the DIT(E), it is clear that he has not found any adverse material to show that the main objects of the assessee are not of....