2021 (9) TMI 107

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....010 passed in ITA.No.1594/Mds/2009 on the file of the Income Tax Appellate Tribunal, Chennai 'D' Bench (for short the Tribunal). 3. The appeal was admitted on 08.1.2011 to decide the following substantial questions of law : "i. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the applicant society is entitled to registration under Section 12AA and approval under Section 80G of the Income Tax Act? ii. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the applicant society was engaged in the business of micro finance by borrowing funds at the rate of 13.5% interest from the banks an....

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....iting, etc., on behalf of the self help group and it tantamounts to charging fee/consideration for the services to the self help group. 5. Aggrieved by the order of rejection of the application for registration under Section 12AA of the Act, the assessee preferred an appeal to the Tribunal, which, by the impugned order, allowed the appeal. Challenging the correctness of the same, the Revenue is before us by way of this appeal. 6. The undisputed facts are that the respondent - assessee is a society registered under the provisions of the Tamil Nadu Societies Registration Act. The CIT did not dispute the fact that the assessee has been engaged in the business of micro finance for women self help group by obtaining funds from nationalized....

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....and inspection charges. 8. When the activity of the assessee, which grants relief to the poor is not in dispute, the genuinity of the claim made by the assessee for registration ought not to have been rejected solely on the ground that certain service charges are being collected. Admittedly, women of the self help groups are people, who come from the marginalized society and they are poor rural women, who do not have the wherewithal to approach the nationalized banks for availing loan. If the assessee does not carry on such activity by rendering financial assistance to the women of self help groups, they will have to be under the mercy of the private financiers, who are charging exorbitant rate of interest. Considering all these aspects,....