TaxTMI 
TaxTMI 
2022 (9) TMI 353
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....various other persons having higher educational qualifications are paid lesser amounts, however, the President and Secretary of the Society are given much more than the salary given to similarly qualified employees. Further, no attendance register nor any appointment letter was produced to explain the genuineness of the salary paid to them. He further noted that salary of Rs. 9,000/- has been paid to the driver of Smt. Kranthi. Thus, there is violation of provision of section 13 of the I.T.Act for which, the assessee is not eligible for registration u/s. 12A of the Act. 3. He further noted that the President of the assessee Smt.Kranthi, is a partner in the firm called NRH Carrier Developers whose address is the same as that of the assessee society. Similarly, he noted that activity of NRH Career Developers is for providing skill development Training and the assessee also does skill development. It is also associated with the Skill Development Program of Government. NRH is receiving Income from National Skill development Corporation. Thus, everything of the assessee is matching with that of NRH Career Developers, a Partnership firm. 4. Another observation made by the ld.CIT(E) is ....
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.... Act, the lease of immovable property for more than one year has to be registered. However, the assessee has not registered the same. In view of the above and relying on various decisions, he held that the assessee is not entitled to grant Registration u/s. 12AA of the Act. He accordingly rejected the Form No.10A filed before him. 6. Aggrieved with such order of the ld.CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:- 1) The Order of the Learned Commissioner of Income Tax (Exemptions), Hyderabad is erroneous both on facts and in law. 2) The Learned commissioner of Income Tax (Exemptions), Hyderabad erred in pre-judging the application made in Form 10A, without verifying the facts and statements. 3) The Learned Commissioner (Exemptions), Hyderabad erred in holding that the president and the Treasurer of the Appellant Organization are holding a place of profit and deriving undue benefit provided to them. 4) The Learned Commissioner (Exemptions) , Hyderabad has overstepped his position in commenting that the interpretation of section1l2AA(4)is 'ridiculous'. 5) The Learned commissioner (Exemptions) Hyderabad has grossly erred in....
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....of income would arise when transaction is not at arm's length and the sale or purchase price is artificially inflated so as to cause undue advantage to other person and divert the income. He accordingly submitted that denial of registration on the ground that undue benefits are given to the President & Treasurer is not justified. 8. So far as the 2nd allegation of the learned CIT (E) that the address of the partnership firm and that of the assessee is same at S.R. Nagar is concerned, he submitted that nowadays many entities are tying up with each other for space and resources sharing. He submitted that the assessee has subsequently taken another premises on lease and working on expanded activities. Therefore, this cannot be a ground for denying registration u/s. 12AA of the I.T.Act. 9. So far as the allegation of the learned CIT (E) that NRH Career Developers is also providing Skill Development Training is concerned, he submitted that NRH Career Developers is a partnership firm and is into providing training and event management activities on its own. It is run by a team of professionals and the partners are credited with remuneration in terms of section 40(b) of the I.T. Act. 1....
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....h the Govt. He submitted that the decision cited by the learned CIT (E) in the case of CIT vs. Anandan Trust (2018) 96 Taxmann.com 207 is not applicable to the fact of the present case since there is no contract in the instant case and therefore, there is no question of any subcontract. 15. So far as the allegation of the learned CIT (E) that the lease deed is not registered and therefore, the assessee has violated the Registration Act and Indian Stamp is concerned, he submitted that the assessee had entered into a lease agreement for the office space with the landlord Mr. Mohd Shakir which is for a period of 5 years and the lease deed is Notarised. This has been accepted by the Govt. Departments and they have approved the projects. Therefore, merely because the assessee has not registered its lease deed will not be a ground for rejection of the registration u/s 12A of the I.T. Act. 16. So far as the various case laws relied on by the learned CIT (E) are concerned, he submitted that the facts of those cases are not applicable to the facts of the instant case. 17. The learned Counsel for the assessee referred to the order passed by the learned PCIT dated 24.9.2021 in assessee's o....
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....dent & Treasurer are comparable and are at par with the market rates. Further, these persons are qualified persons looking after more than 10 centers. It is also his submission that the assessee to reduce its financial burden, shared the premises of the partnership firm. Therefore, the genuineness cannot be doubted. It is his submission that the assessee entered into MoU with other entities only to get the eligibility to apply for the schemes of the government and there is no element of business. Further, the genuineness of the books cannot be doubted since the cash withdrawals were made for payment of salary to different individuals and not to a single person and the payments are within the permissible limit u/s 40A(3) of the I.T. Act. It is also his submission that the assessee has entered into MoU with the Govt. of A.P for implementation of certain welfare schemes and there is no other contract. So far as the advances are concerned, it is his submission that the same has been taken from Mrs. Kranthi and not from Mr.Karthik and the same is a typographical error. So far as the lease deed is concerned, it is his submission that such lease deed is for a period of 5 years and the var....