2011 (6) TMI 1006

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....AYANAN, J. This appeal is filed by the assessee. The appeal is directed against the order of the Commissioner of Income-tax at Salem passed under section 12AA of the Income-tax Act, 1961 through his proceedings dated 25-8-2009, rejecting the application of the assessee for grant of registration under the Income-tax Act, 1961 as a charitable institution. 2. The assessee trust is running ....

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...., 224 ITR 310. 4. The main reason for coming to the conclusion that the assessee trust is interested in making profits is that the assessee had provided free bus service to students studying in Tamil medium to attract more students and thereby collecting more income. He also pointed out that the assessee has established a teachers training institute, again for making profit out of the said....

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....That does not mean that the bus services were provided by the assessee for the purpose of making profit. Actually the assessee has provided free bus service to sustain the Tamil medium school, as otherwise students will not come forward to join the school. Likewise the assessee has started another institution of teachers training institute which is also essentially a part of educational activ....

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....ary for the assessee trust to accumulate surplus income. 7. Therefore, we do not find any basis to support the finding of the Commissioner of Income-tax that the assessee trust has been established with the motive of earning profit. 8. Another reason pointed out by the Commissioner of Income-tax is that out of 14 trustees, only two trustees are authorized to run the administration of the ass....