TaxTMI 
TaxTMI 
2018 (2) TMI 1647
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....ssessee had applied for registration u/s 12AA which the CIT (Exemptions) has refused. Learned A. R. submitted that at the time of registration u/s 12AA the only aspect which CIT (Exemptions) is expected to examine is object of the assessee and genuineness of the activities of the assessee for achieving of these objects. It was submitted that objects of the society are charitable in nature and a copy of the objects was placed in paper book pages 62 to 72. He submitted that vide para 8 of his order, CIT (Exemptions) has held that mere recital of objects or activities without cogent or corroborative evidence is not sufficient by themselves to enable a registering authority to grant registration. In this respect, Learned A. R. submitted that as....
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.... for the financial year 2013-14 to 2015-16 and had also filed copies of income tax return which clearly establish that assessee was running a college. Therefore, this finding of CIT (Exemptions) that genuineness of the activities could not be verified is not based upon the facts. 4.1 At the time of granting registration u/s 12AA, the CIT (Exemptions) is empowered to examine the objections of the assessee and also the genuineness of the activities of society with respect to achievement of those objects. Hon'ble Allahabad High Court in the case of CIT vs. Red Rose School [2007] 212 CTR (All) 394 has exhaustively examined the provisions of section 12AA of the Act and has held that CIT (Exemptions) has to satisfy himself about the genuinen....
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....osed objects. The profit earning or misuse of the income derived by charitable institution from its charitable activities, may be a ground for refusing exemption only with respect to that part of the income but cannot be taken to be a synonym to the genuineness of the activities of the trust or the institution. This is more evident if we see the provisions of Section 11, which, while exempting the income given in its various subclauses from being included in the total income of the previous year of the person in receipt of the income, for example, in subclause (i) says 'income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; an....
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....ed, if the conditions attached to Sub-section (2) in its Sub-clauses (a) and (b) are complied with. 24. Sub-section (3) again says that if any income referred to in Sub-section (2) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or ceases to remain invested or deposited in any of the forms or modes specified in Subsection (5), or is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in Clause (a) of that sub-section or in the year immediately following the expiry thereof, or is credited or paid to any trust or institution registered under Section 12AA or to any fund or institution or trust ....
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....e income derived by the trust or the institution, which is being run for a charitable purpose and, therefore, while considering the registration under Section 12AA, the scope of enquiry of the CIT, would be limited to the aforesaid extent. 27. Since in the absence of such registration, the trust or the institution would not be entitled to claim any exemption of the income derived, though it is being run for charitable purposes, the registration has to be considered in the light of the specific provisions aforesaid and in the manner that it furthers the object of the scheme of registration and, of course, exemption of the entire income or the part of the income, as the case may be, of a charitable trust or institution has to be considered....