TaxTMI 
TaxTMI 
2017 (12) TMI 1720
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....eral public utility not involving the carrying on of any activity for profit. (f) To promote cultural sports, religious and charitable activities. 3. It had been granted registration u/s. 12A of the Act vide order dated 03.05.1995. The Ld. Commissioner of Income Tax, invoking his powers u/s. 12AA(3) of the Act, cancelled the registration granted u/s. 12A holding the activities of the assessee society as not being genuine and not being carried out in accordance with the objects of the trust for the following reasons: (i) It was involved primarily in the business activity of trading in mutual funds and its main object, therefore, was not carrying out any charitable activity. (ii) It had spent only a meagre portion of its total receipts for charitable purpose in financial years 2007-08 to F.Y 2009-10. (iii) That the only application of its income was giving donations to other purported charitable institutions which as per the Ld. Commissioner of Income Tax could not be treated as application of its income in terms of section 11(1)(a) of the Act. (iv) The purpose for which salary was paid by the assessee society did not appear to be genui....
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....ount in such manner or change from one to another as they may deem fit and in accordance with the provisions of the law for the objects of the trust." (b) That giving donation to other charitable institutions was to be considered application of income as per section 11(1)(a) of the Act and CBDT Instruction No. 1132 dt. 05-01-78. The Ld. counsel for assessee drew our attention to the institutions to which donation was given as reproduced in the order of the Ld. Commissioner of Income Tax at pages 3 to 5 as under: F. Y. 2007-08 Sr. No. Name of the Institution Amount 1 Inner Wheel Club for support of one child 15000 2 Iskcon Chandigarh for religious activities 7100 3 Lions Club Chandigarh for five eye operations 12500 4 Maharshi Patanjali Vigya Mandir Samiti, Allahabad, for sponsorship fee for two 12360 5 Oxfam Trust India for poor children education 6800 6 Pannalal & Darshanlal at Guptkashi 36335 7 PHD Rural Development Board/Foundation 100000 8 Rajasthan Parishad towards advertisement and 25000 9 Society of Rehabilitation of Mentally 100000 10. Pannalal and Darshanlal at Guptk....
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.... stated that the salary paid was genuine. The Ld. counsel for assessee on the basis of above, stated that there was no discrepancy as such to hold the activities of the assessee society as not being genuine or not in consonance with its stated objects and thus the cancellation of registration u/s. 12AA(3) of the Act was unjustified and unwarranted. 6. The Ld. DR, on the other hand, referring to the financial data, as reflected in its audited financial statements and reproduced in the earlier part of our order, pointed out that the only utilization of income by the assessee society in three financial years i.e. from financial year 2007-08 to financial year 2009-10 was giving donations to other institutions. The Ld. DR pointed out that the assessee had not even demonstrated whether donations given to these institutions had been found to have been utilized for the purpose for which it had been given, nor had it been demonstrated that the institutions to whom donations had been given were charitable institutions registered u/s. 12A of the Act. The Ld. DR stated that for the aforesaid reasons, donation given by the assessee society could not be treated as application of income. Th....
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....iving donations in the objects of the assessee society, the act of giving donations tantamounted to application of funds as per section 11(1)(a) of the Act as accepted by the Revenue also vide the CBDT Circular No. 1132 issued on 05.01.1978 which stated so in unambiguous terms. 9. We have heard the rival contentions and having gone through the order of the Ld. Commissioner of Income Tax we find no reason to interfere with the same. The fact that the assessee society has been applying its income solely by way of giving donations to other institutions, as is evident from the audited financial figures of the past three years as reproduced above, is not disputed. It is also an admitted fact that the activity of giving donations was included as part of its stated objects in the trust deed by way of amendment to the trust deed made on 09.01.2000 i.e. subsequent to the grant of registration u/s. 12A of the Act on 03-05-95, meaning thereby that the activity of giving donations was not considered while granting registration u/s. 12A of the Act. It is also an admitted fact that subsequent to the amendment made, no fresh registration u/s. 12A had been sought by the assessee. Clearly, there....