TaxTMI 
TaxTMI 
2017 (4) TMI 1065
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....G" New Delhi is justified in deleting the addition of Rs. 1,15,03,000/- despite the fact that the assessee was not registered under section 12AA of the Income Tax Act? 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. During the course of registration proceedings under section 12AA of the Act, the assessee trust submitted audited accounts for the financial years 2006-07, 2007-08 and 2008-09. On perusal of the balance sheet for the financial year 2006-07 relevant to the assessment year 2007-08, it was observed that the trust had collected a sum of Rs. 1,15,05,100/- as corpus fund. As the trust was neither registered under section 12AA nor under section 10(23C) (vi) of the Act during the year under consideration, the excess of income over expenditure was chargeable to tax. The assessee trust had not filed its return of income for the assessment year 2007-08 relevant to the financial year 2006-07. Notice under Section 148 of the Act was issued and case was selected for scrutiny assessment. The Assessing Officer held that as the assessee was not registered under section 12AA of the Act during the year under consideration, i....
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....e. The assessee further received corpus donation of Rs. 15 lacs from three concerns. The registration under section 12AA of the Act had been granted to the assessee by the CIT w.e.f 1.4.2009 which was before the date of the assessment order passed on 30.12.2011 though obtaining registration under Section 12AA of the Act was not mandatory for claiming exemption under section 10(23C)(iiiad) of the Act. According to this provision, any income received by any person on behalf of any university or other educational institution existing solely for educational purposes and not for the purpose of profit is exempt if the aggregate annual receipt of such university or educational institute does not exceed the amount of annual receipt as may be prescribed. After examining the matter, the Tribunal concluded that the objects of the assessee trust being charitable had not been objected nor it was the case of the revenue that the donation in the shape of land or amount had been utilised for any other purposes except on the objects of the assessee trust. Of course, no educational activity had been started by the assessee during the year but at the same time, this fact had not been doubted that the....
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....ledgement of return, balance sheet, profit and loss account, corpus funds account, property account, cash book, bank account, bank commission account, bank interest account, trust deed dated 2.6.2006, requisite for amendment in trust deed, amended trust deed dated 23.12.2009, gift deed dated 4.12.2006, order dated 29.2.2012 of the ITAT directing the learned CIT(Appeals) to grant registration, order dated 5.6.2012 of the learned CIT granting registration under section 12AA and order under section 10(23C)(vi) dated 24.9.2012 granting approval, made available at page Nos. 1 to 77 of the paper book. Learned AR also placed reliance on the following decisions:- i) Nitya Education Society vs. JCIT (2012) 51 SOT 103; ii) CIT vs.Doon Foundation 154 ITR 208 (Cal.); iii) Param Hans Swami Uma Bharti Mision vs. ACIT (2013) - 140 ITD 429 (Del.); 8. The learned senior DR on the other hand tried to justify the first appellate order with the submission that undisputedly the trust had not commenced any activities for establishing the educational institution during the year under consideration and no registration under section 12AA was available to the assessee trust for the year under co....
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....ough such registration has been granted w.e.f 30.3.2009. The mechanism provided in section 12AA of the Act for grant of such registration suggests that the learned CIT must have conducted an inquiry about the genuineness of the activities of the trust and it also suggests that aims and objects contained in the Memorandum of Association are genuine and charitable in nature. In that case, society was in existence but actual educational activity has not taken place. The ITAT held that the assessee still would get the benefit of section 10(23C)(iiiad) of the Act. In the case of Pawan Hans Swami Uma Bharti Mission vs. ACIT (supra), it has been held by the Delhi bench of the ITAT that only annual receipt of school or university would be considered for deciding the exemption limit under section 10(23C) (iiiad). Total income of society running that school or university is not to be considered under that section. Income from interest and FDRs was an additional income of society and cannot be considered to be part of annual receipt of the school. It was held that the assessee was eligible for exemption under section 10(23C)(iiiad) of the Act as annual school receipts did not exceed Rs. 1 cro....