2012 (1) TMI 262

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....cts of the case are that the assessee society was registered with the Registrar of Society, Yamuna Nagar on 16.07.2004 and had applied for registration under section 12A(1)(aa) of Income Tax Act, 1961 in Form No.10A on 23.3.2009. The assessee had submitted copies of audited account for the year ending on 31.3.2006, 31.3.2007 and 31.3.2008. In the earlier years the assessee had claimed its income as exempt under section 10(23C) as its receipts were less than Rs. 1 crore for the said years. The said deduction was allowed to the assessee from year to year. However, during the year under consideration, the total receipts had exceeded Rs. 1 crore and the assessee had applied for registration under section 12A of the Income Tax Act. 4. The Com....

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....purpose and not to earn profit, it would be a charitable purpose. The Commissioner of Income Tax placed reliance on the ratio laid down by the Hon'ble Supreme Court in Municipal Corporation of Delhi Vs. Children Book Trust, (1991) SCALE (2) 491 (SC). The Commissioner of Income Tax held that the activity of the society could not be said to be charitable. Accordingly, the benefit of registration under section 12AA of the Act was not allowed to the assessee. It was further observed by the Commissioner of Income Tax that as per clause (viii) the society is free to invest its funds in any manner its managing committee may deem fit. Thus, the investment clauses is also not in conformity with the provisions of section 11 (5) of the Income Tax ....