TaxTMI 
TaxTMI 
2020 (2) TMI 726
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....order passed by the CIT(E), Bhopal was set aside. 2. The appellant has claimed the following substantial question of law for determination by this Court:- "Whether, on the facts & circumstances of the case, the ITAT is correct in directing the Ld. CIT(E) to grant the registration u/s 12AA of that Act irrespective of the findings by the CIT(E) that the society exists for the purpose of profit of the office bearers not for charitable purpose thus attracts proviso to section 13 (1) (c) of the I.T. Act ?" 3. Brief facts of the case are that the respondent-Divine Shiksha Samiti (for short "the assessee Society") applied for registration under Section 12AA of the Act before the Commissioner of Income Tax, Bhopal (hereinafter referr....
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....o its office bearers. It is further argued that the learned Tribunal has erred in recording the finding that while considering the application for registration of assessee Society, only the object of the assessee Society is required to be seen. Contending thus, it is prayed that this appeal may be allowed and the order passed by the Tribunal may be set aside. 5. We have heard learned counsel for the appellant/Department and find no force in the arguments advanced by him. 6. In the case in hand, the assessee Society applied for registration under Section 12AA of the Act before the CIT, Bhopal which was rejected mainly on the ground that the payment of the rent of the premises to related parties is not on pro rata basis though the premi....
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....ST Mary's Higher Secondary School at Sehore. b. Regarding the observation of Learned CIT (Exemption) about the payment of rent to related parties is not on pro rata basis though the premises are adjoining it is submitted that the observation is not correct. It is submitted that there is no such irregularity and the rent paid is most reasonable. It is also well within the fair rental value as assessed by the office of PWD Sehore. Copy enclosed at P.B. Page no.58 to 63 To further explain we have compiled all the details in a tabular format which explains the total area of land, built up area, open land, rent as per agreement and fair rental value as per PWD Norms as under :- S. No. Name of land lord Land Area ....
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.... for playground which has also been mentioned in rent agreement. The learned CIT (Exemption) totally ignored the area of open land. The open land area was 20511 sqft. Copy of Rent agreement and sale ded are enclosed as per PB Page No.31 to 42 ii. Babu Antony :- In the premises of Babu Antony, there was open land for playground. The learned CIT (Exemption) totally ignored the area of open land. The open land are was 32000 sqft. Further no built up area has been mentioned whereas built up area is 3000 Sq. Ft. on ground floor. Copy of Rent Agreement and sale deed are enclosed as per PB Page No.43 to 49 iii. Manish Tiwari :- In the premises of Manish Tiwari it was mentioned in rent agreement that 3 Floors has....
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....rther submitted that no taxes have been paid by the assessee but the same have only been paid by the landlord. • In view of above, it is submitted that the observation that assessee incurred Rs. 7,89,850/- in FY 2014-15 for these expenses and diverted for personal purposes of office bearers and families is factually incorrect. • Further amount of Rs. 7,89,850/- has not been fully incurred for building repairs but it is incurred on cleaning charges, sanitation charges, white wash charges, repair to furniture and fixtures, repair of Lab equipments, projectors, sports equipments, office equipments and computers. Copy of ledger account to explain, is enclosed as per P.B. Page No.64 to 74 Summary of repair and maintenan....
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....nbsp;xxxx " After noticing the aforesaid, the Tribunal concluded that the issue regarding payment of rent to the members could be examined at the time of the assessment proceedings. 7. Further, the Tribunal noticed that Section 12AA of the Act nowhere provides that CIT (Exemption) while considering the application for registration is also required to examine whether the income derived by the Trust is being spent for charitable purposes or the Trust is earning profit. It had taken note of the decisions in the cases of CIT Vs. DPR Charitable Trust - (2011) 16 DTR 410, Vidyadayani Shiksha Samiti Vs. CIT (Exemption) - ITA No.309/Del/2016, DIT Vs. Venkatesh Education Society, High Court of Karnataka (2012) 82 CCH 309, Fifth Generation Educ....