TaxTMI 
TaxTMI 
2020 (8) TMI 359
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.... Education Association (DTEA) formerly called (Madrasi Education Association) in 1945 for running a school. 2.1 The objects of the assessee society as per the memorandum of objectives inter alia include: i) to pioneer, cultivate and encourage activities in educational, social, cultural and recreational fields ii) to cultivate literary and artistic talents iii) to provide a common meeting place with a reading room and attached library, and iv) to promote fine arts 2.2 In July, 2010, Shriram Group based at Chennai decided to take over the management/running of the society in order to fulfill the objects of the Society and introduced funds for the purpose of the same. The Society wanted to construct building/s for the furtherance of its objects after demolition of the old dilapidated building on the site. The Society already held a license in the form of No Objection Certificate (NOC) from the Land and Development Office but there were no building approval plans. The Society requested the New Delhi Municipal Corporation for the same and obtained the building approval plan in the year 2013. Thereafter, the Shriram Group introduced funding to th....
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....or grant of registration by raising the following grounds: 1. The order of the CIT (Exemption) rejecting the appellant's application for grant of registration u/s.12A of the Income tax Act is erroneous both on facts and in law. 2. The CIT (E) erred in concluding that the appellant society has not carried out any charitable activities though the same was created in the year 1941 and also has not complied with its rules and regulations. 3. The CIT (E) failed to appreciate that the objects of the appellant society are charitable in nature as evidenced by its charter and the activities of the society have always been genuine. 4. The conclusion of CIT (E) that the society has not carried out any charitable activities though the same was created in the year 1941 is contrary to his own finding in para 9 of his order that "the appellant society in past few years has not carried out any charitable activities". 5. The CIT (E) failed to appreciate construction of building for use as auditorium, reading room etc., is for the purpose of promotion and development of art and culture and constitutes an integral part of charitable purpose. 6. Th....
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....ns and circumstances beyond the control of the appellant society especially the new governing body which took over the management in the year 2010 and such temporary interruption or cessation cannot be held against the appellant society as a valid reason to refuse grant of registration u/s.12A of the Income tax Act. 13. The CIT (E) failed to appreciate that during the period when the regular activities were interrupted because of the unsafe nature of the building then governing body could not carry out its normal functions and that cannot be a valid ground for refusing registration u/s.12A. 14. The CIT (E) failed to appreciate that non-compliance by the Executive Committee non compliance with some of the rules and regulations of the appellant society as pointed out in the Auditors Report for the years 2006 to 2010 was caused by closure and sealing of the building as unsafe and that was only a temporary cessation prior to the new governing body taking over the management in the year 2010 and those deviations, if any, were not valid material for rejecting registration u/s.12A. 15. The CIT (E) erred in concluding that the appellant society is not for public ....
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.... no objection certificate from the Land Development Office was cancelled because there was unauthorized construction on the land allotted by the Government to the Society. The Ld. CIT-DR also submitted that the objects clause restricted the benefit of the society's activities to its members and that the approval of Managing Committee was necessary for the purpose of becoming a member of society. It was also submitted by the Ld. CIT-DR that only a portion of the land so allotted by the Government on perpetual lease was being utilized for running a school and the remaining portion was being used to run a club-house which could not be considered a charitable activity by any stretch to imagination. The Ld. CIT-DR also submitted that the various judgments relied upon by the Ld. Authorized Representative were distinguishable on the factual matrix of the case. The Ld. CIT-DR supported the order of the Ld. CIT (E) vehemently and submitted that the registration had been rightly refused. 5.0 We have heard the rival submissions and have also perused the material on record. We have also carefully gone through the impugned order. A perusal of the impugned order shows that one of the reaso....
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....ection 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust." 5.1 Undisputedly, in the present case, the Ld. CIT (E) has not recorded a finding that the activities of the Society were not genuine or were not in accordance with the object....