Saraswati Vidya Mandir, Jagadhari V. CIT, Panchkula

ITA 1069/CHANDI/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5372 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Charitable institution
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1069 /CHD/2013 (UNDER SECTION 80G(5) AND ITA NO.1070 /CHD/2013 (UNDER SECTION 12AA(1)(B) SARASWATI VIDYA MANDIR VS. THE C.I.T., BURIA GATE, PANCHKULA. JAGADHARI. PAN: AADTS6428H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOEL RESPONDENT BY : SHRI AMARVEER SINGH, DR DATE OF HEARING : 06.01.2014 DATE OF PRONOUNCEMENT : 17.01.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THESE TWO APPEALS FILED BY DIFFERENT ASSESSEES ARE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX ( APPEALS), PANCHKULA EACH DATED 18.09.2013, AGAINST THE ORDER PASSED UND ER SECTIONS 80G(5) AND 12AA(1)(B) RESPECTIVELY OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE T HOUGH AGAINST THE SEPARATE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS), PANCHKULA EACH DATED 18.09.2013 UNDER SECTIONS 80G(5) AND OTH ER UNDER SECTION 12AA(1)(B) OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT) WERE HEARD 2 TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ISSUE RAISED IN ITA NO.1070/CHD/2013 IS AGAI NST DENIAL OF REGISTRATION TO THE ASSESSEE TRUST BY THE COMMISSIO NER OF INCOME TAX VIDE ORDER PASSED UNDER SECTION 12AA(1)(B) OF THE A CT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST WAS CREATED ON 1.5.1960 AND WAS REGISTERED WITH THE REGISTRAR O F SOCIETIES. THE ASSESSEE WAS RUNNING EDUCATIONAL INSTITUTION AND EA RLIER WAS GRANTED EXEMPTION UNDER SECTION 10(23C) OF THE ACT. HOWEVE R, AS ON 20.3.2013 THE ASSESSEE FILED APPLICATION FOR REGISTRATION UND ER SECTION 12A OF THE ACT. THE COMMISSIONER OF INCOME TAX NOTED THAT THE MAIN OBJECT/PURPOSE OF THE SOCIETY WAS TO PROVIDE EDUCAT ION WHICH IN TURN WAS CONSIDERED TO BE CHARITABLE IN NATURE IN TERMS OF S ECTION 2(15) OF THE ACT. THE COMMISSIONER OF INCOME TAX CALLED FOR THE REPORT IN THIS REGARD FROM THE ASSESSING OFFICER IN ORDER TO VERIF Y THE ACTIVITIES UNDERTAKEN BY THE SOCIETY AND IT WAS REPORTED THAT THE SOCIETY WAS RUNNING TWO SCHOOLS. FURTHER THE DETAILS OF INCOME AND EXPENDITURE FOR THE LAST THREE FINANCIAL YEARS REFLECTED THAT THE A PPLICATION OF INCOME WAS LESS THAN 85% OF THE RECEIPTS. THE ASSESSING OFFIC ER AS WELL THE ADDL.CIT, PANCHKULA RANGE REPORTED THAT APPLICATION OF INCOME WAS LESS THAN 85% OF THE GROSS RECEIPTS. THE COMMISSIONER O F INCOME TAX IN ORDER TO VERIFY THE GENUINENESS OF THE ACTIVITIES O F THE SOCIETY ISSUED NOTICE FOR HEARING. IT WAS FURTHER NOTICED THAT TH E APPLICATION OF RECEIPTS WAS LESS THAN 85% OF THE GROSS RECEIPTS AND IN VIEW THEREOF, THE REGISTRATION UNDER SECTION 12A OF THE ACT WAS REJEC TED. 5. THE ASSESSEE IS IN APPEAL AGAINST THE SAME. TH E LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT AS PER THE AIMS AND O BJECTS OF ASSESSEE 3 SOCIETY, IT WAS RUNNING TWO SCHOOLS WHICH IN TURN W ERE AFFILIATED WITH THE GOVERNMENT OF HARYANA. IT WAS FURTHER POINTED OUT BY THE LEARNED A.R. FOR THE ASSESSEE THAT AT THE TIME OF GRANT OF REGISTRATION, THE COMMISSIONER OF INCOME TAX IS ONLY TO LOOK INTO AIM S AND OBJECTS OF THE SOCIETY AND GENUINENESS OF THE SOCIETY AND CANNOT G O INTO THE QUESTION OF UTILIZATION OF THE RECEIPTS OR OTHERWISE TO THE EXT ENT OF 85% OF THE TOTAL RECEIPTS. FURTHER RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE CHANDIGARH BENCH OF THE TRIBUNAL IN GLOBAL EDUCATIO N SOCIETY VS. CIT IN ITA NO.646/CHD/2011. 6. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE COMMISSIONER OF INCOME TAX. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT, EX EMPTION IS ALLOWED TO A SOCIETY AND THE PRE-REQUISITE FOR GRANT OF THE SA ID EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT IS THAT THE SOCIETY I S TO GET ITSELF REGISTERED AS A TRUST UNDER THE PROVISIONS OF SECTION 12A OF T HE ACT. THE COMMISSIONER OF INCOME TAX IN VIEW OF THE PROVISION S OF SECTION 12A OF THE ACT IS EMPOWERED TO LOOK INTO THE OBJECTS OF TH E TRUST AND FURTHER ENQUIRE INTO THE GENUINENESS OF THE ACTIVITIES CARR IED ON BY THE ASSESSEE TRUST. WHERE THE COMMISSIONER OF INCOME TAX IS SAT ISFIED THAT THE AIMS AND OBJECTS OF THE ASSESSEE TRUST ARE IN LINE WITH THE PROVISIONS OF SECTION 2(15) OF THE ACT, THEN REGISTRATION UNDER S ECTION 12AA OF THE ACT WOULD BE GRANTED TO THE ASSESSEE. HOWEVER, WHERE T HE COMMISSIONER OF INCOME TAX IS SATISFIED THAT THE ACTIVITIES OF THE TRUST ARE NOT GENUINE THEN NO REGISTRATION UNDER SECTION 12A OF THE ACT I S TO BE ALLOWED. 4 8. WE FIND THAT SIMILAR ISSUE OF GRANT OF REGISTRAT ION UNDER SECTION 12A OF THE ACT AROSE BEFORE THE TRIBUNAL IN GLOBAL EDUCATION SOCIETY VS. CIT (SUPRA) WHERE THE TRIBUNAL VIDE PARA NOS.8 TO 11 HELD AS UNDER: 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN ORDER TO AVAIL EXEMPTION UNDER SECTIONS 11 AND 1 2 OF THE ACT, THE ASSESSEE TRUST IS REQUIRED TO APPLY AND GET ITS ELF REGISTERED AS A TRUST UNDER THE PROVISIONS OF SECTION 12A OF THE ACT. FURTHER IT IS PROVIDED UNDER THE SAID SECTION THAT THE COMMISS IONER OF INCOME TAX IN EXERCISE OF ITS POWER SHALL LOOK INTO THE OB JECTS OF THE TRUST WHETHER THE SAME ARE GENUINE AND ALSO TO ENQUIRE IN TO THE GENUINENESS OF ACTIVITIES CARRIED ON BY THE ASSESSE E TRUST. IN CASE THE COMMISSIONER OF INCOME TAX IS SO SATISFIED THAT AIMS AND OBJECTS OF THE TRUST ARE IN LINE WITH THE PROVISION S OF SECTION 2(15) OF THE ACT, THE REGISTRATION UNDER SECTION 12AA OF THE ACT WOULD BE GRANTED TO THE ASSESSEE, IN ORDER TO ENTAIL IT TO A VAIL DEDUCTION UNDER SECTIONS 11 AND 12 OF THE ACT. 9. WE FIND THAT SIMILAR ISSUE AROSE BEFORE THE TRIB UNAL IN SURYA EDUCATIONAL & CHARITABLE TRUST VS. CIT-II, CHANDIGA RH IN ITA NO.223/CHD/2009 ORDER DATED 30.11.2009, WHEREIN I N AN APPEAL FILED AGAINST THE ORDER PASSED UNDER SECTION 12AA O F THE ACT, THE TRIBUNAL HELD THAT WHERE THE OBJECT OF THE TRUST WA S TO ESTABLISH EDUCATION INSTITUTION, WHICH HAS BEEN ACCEPTED BY T HE COMMISSIONER OF INCOME TAX AND ONLY THE GENUINENESS OF THE ACTIVITIES HAVE TO BE LOOKED INTO IN ORDER TO VERIF Y THE CLAIM OF REGISTRATION UNDER SECTION 12AA OF THE ACT. WHERE THE ASSESSEE IS CARRYING ON THE ACTIVITIES IN LINE WITH ITS OBJECTS , THE GENUINENESS OF THE SOCIETY COULD NOT BE QUESTIONED. WE FIND TH AT WHILE GRANTING THE REGISTRATION UNDER SECTION 12AA OF THE ACT, THE SCOPE OF COMMISSIONER OF INCOME TAX IS LIMITED AND ALLOWANCE UNDER SECTION 11/12 OF THE ACT IS TO BE LOOKED INTO BY TH E ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS . THE TRIBUNAL FURTHER HELD THAT SECONDLY AT THE LEVEL OF GRANTING REGISTRATION BY THE COMMISSIONER OF INCOME TAX, THE ABSENCE OR PRES ENCE OF THE SURPLUS IS NOT RELEVANT. THE ORDER OF THE TRIBUNAL HAS FURTHER BEEN APPROVED BY THE HON'BLE HIGH COURT VIDE ORDER DATED 5.10.2011 IN ITA NO.701 OF 2010 IN THE CIT-II, CHANDIGARH VS. M /S SURYA EDUCATIONAL & CHARITABLE TRUST, CHANDIGARH. 10. FURTHER THE HON'BLE PUNJAB & HARYANA HIGH COURT IN BUNCH OF MATTERS WITH LEAD ORDER IN CIT, BHATINDA VS. BAB A DEEP SINGH EDUCATIONAL SOCIETY, BHATINDA IN ITA NO.881 OF 2010 DATE OF DECISION 13.10.2011 ADDRESSED SIMILAR ISSUE OF GRAN T OF REGISTRATION UNDER SECTION 12AA OF THE ACT WHICH WA S DENIED TO THE ASSESSEE DUE TO THE ENQUIRIES MADE BY THE COMMISSIO NER OF INCOME TAX BEFORE GRANTING OF REGISTRATION UNDER SECTION 1 2AA OF THE ACT. THE HON'BLE HIGH COURT IN CIT, BHATINDA VS. BABA DE EP SINGH EDUCATIONAL SOCIETY, BHATINDA (SUPRA) REFERRED TO T HE RATIO LAID DOWN IN CIT-II, CHANDIGARH VS. M/S SURYA EDUCATIONA L & CHARITABLE TRUST, CHANDIGARH (SUPRA) AND OBSERVED A S UNDER: THE POWER OF THE CIT REGARDING THE SCOPE OF SECTION 12AA OF THE ACT HAS BEEN CONSIDERED BY THIS COURT IN THE ORDER DATED 5.10.20 11 PASSED IN ITA NO.701 OF 2010 (COMMISSIONER OF INCOME TAX-LL, CHANDIGARH VS. M/S SURYA EDUCATIONAL & 5 CHARITABLE TRUST) AND IT HASBEEN HELD THAT SECTION 12AA OF THE ACT, R EQUIRES SATISFACTION IN RESPECT OF THE GENUINENESS OF THE A CTIVITIES OF THE TRUST, WHICH INCLUDES THE ACTIVITIES WHICH THE TRUST WAS UNDERTAKING AT P RESENT AND ALSO WHICH IT MAY CONTEMPLATE TO UNDERTAKE. THE INSERTION OF SUB SECT ION 3 TO SECTION 12AA OF THE ACT REGARDING THE POWERS OF THE COMMISSIONER TO CANCEL THE REGISTRATION IF THE ACTIVITIES OF THE TRUST ARE NOT CARRIED OUT IN ACCORDANCE WITH SUCH OBJECTS WAS ALSO NOTICED. THE ALLAHABAD HIGH COURT IN COMMISSIONER OF INCOME TAX VS. RED ROSE SCHOOL 2007 (163) TAXMAN 19 HAS HELD THAT THE JURISDICTION OF THE COMMISSIONER AT THE STAGE OF PROCESSING APPLICATION UNDER SECTION 12AA OF THE ACT IS LIMITED REGARDING WHETHER THE ACTIVITIES ARE GENUINE AND IN CONSONANC E WITH THE OBJECTS OF THE TRUST OR INSTITUTION AND WHERE EDUCATION IS BEING IMPARTED A S PER THE RULES AND THE FACTUM OF THE ESTABLISHMENT AND RUNNING OF SCHOOLS IS NOT DIS PUTED THE SAME WAS A GENUINE ACTIVITY AND THE ENQUIRY REGARDING GENUINENESS OF T HE ACTIVITIES CANNOT BE STRETCHED BEYOND THIS. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT WOULD BE CLEAR THAT RESPONDENT- SOCIETY WHICH WAS ADMITTEDLY RUNNING A POLYTECHNIC COLLEGE AND THE ACTIVITIES WERE INTERWOVEN FOR FURTHERING THE PROJECTS AND ACT IVITIES PERTAINING TO EDUCATION, THE TRIBUNAL RIGHTLY DIRECTED THAT REGISTRATION SHO ULD BE GRANTED TO THE RESPONDENT- SOCIETY WITH THE RIDER THAT THE SAME COULD ALWAYS B E CANCELLED IF IT CAME TO THE NOTICE OF THE CIT THAT THE SOCIETY WAS NOT CARRYING ON THE ACTIVITIES AS PER ITS OBJECTS. THE COMMISSIONER WHILE PROCESSING THE APPLICATION UNDER SECTION 12AA OF THE ACT WAS NOT TO ACT AS AN ASSESSING AUTHORITY AND THUS, THE TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL FILED BY THE SOCIETY IN THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE. 11. APPLYING THE ABOVE SAID RATIO TO THE FACTS OF T HE PRESENT CASE WE FIND THAT THE ASSESSEE TRUST WAS REGISTERED ON 1 .10.2009 AND THE CERTIFICATE OF REGISTRATION OF SOCIETIES IS PLACED AT PAGE 2 OF THE PAPER BOOK. THE COPY OF MEMORANDUM AND ARTICLE OF ASSOCIATION AND RULES AND REGULATIONS OF THE SOCIETY ARE PLACED AT PAGES 24 TO 29 OF THE PAPER BOOK. AS PER CLAUSE 4(A) THE FIRST OBJECT OF THE ASSESSEE SOCIETY IS TO PROMOTE DENTAL EDUCATION AND AS PER CLAUSE 4(B) THE ASSESSEE IS TO ESTABLISH AND TO PROMOTE ES TABLISHMENT OF OR TO RENDER AID TO SCHOOL, COLLEGE, EDUCATIONAL INSTI TUTIONS, ETC. I.E. CLAUSES 4(C) TO 4(R) ARE ANCILLARY TO THE MAIN OBJ ECTS OF THE ASSESSEE TRUST. THE SAME IS EVIDENT FROM THE PERUS AL OF THE BALANCE SHEET PLACED AT PAGE 7 OF THE PAPER BOOK FO R THE YEAR ENDING 31.3.2010 WHERE THE ASSESSEE HAD SHOWN INVES TMENT IN LAND AND BUILDING OUT OF THE FUNDS RAISED BY IT. THE AS SESSEE APPLIED FOR REGISTRATION UNDER SECTION 12A OF THE ACT IN TH E FIRST YEAR OF ITS FORMATION. ADMITTEDLY, THE ASSESSEE IS CARRYING ON THE OBJECTS OF PROVIDING EDUCATION WHICH IS RECOGNIZED AS CHARITAB LE PURPOSE UNDER SECTION 2(15) OF THE ACT. THE ASSESSEE CLAIM S THAT IT IS CARRYING ON OBJECT OF EDUCATION BY WAY OF ESTABLISH ING DENTAL COLLEGE. IN VIEW OF THE ABOVE SAID FACTS WE FIND N O MERIT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX IN REJECTIN G THE REGISTRATION UNDER SECTION 12AA OF THE ACT OBSERVIN G THAT EXCEPT FOR OBJECT NO.(I), ALL OTHER OBJECTS FALL UNDER ANY OTHER OBJECT OF PUBLIC UTILITY. IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT, BHATINDA VS. BA BA DEEP SINGH EDUCATIONAL SOCIETY, BHATINDA (SUPRA), THE PO WER OF THE COMMISSIONER OF INCOME TAX WHILE GRANTING REGISTRAT ION IS TO LOOK INTO THE OBJECT OF THE SOCIETY AND COME TO A SATISF ACTION IN RESPECT OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. IN THE FACTS OF THE PRESENT CASE WHERE ADMITTEDLY THE ASSESSEE IS RUNNI NG DENTAL 6 COLLEGE AND ACTIVITIES WERE BY WAY OF CONSTRUCTING THE BUILDING FOR ESTABLISHING THE DENTAL COLLEGE TO PROVIDE EDUCATIO N AND CONSEQUENTLY THE ASSESSEE IS ENTITLED TO THE GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. IN VIEW THEREOF, WE HOLD THAT WHERE THE OBJECTS OF THE TRUST WERE GENUINE I.E. OF PROVI DING EDUCATION AND THE ACTIVITIES UNDERTAKEN BY IT WERE ALSO GENUI NE AS IT HAD STARTED CONSTRUCTING THE BUILDING IN WHICH SUCH DEN TAL COLLEGE HAS TO BE ESTABLISHED, THE CLAIM OF THE ASSESSEE FOR GR ANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT FOR CARR YING ON THE OBJECTS OF RUNNING THE EDUCATIONAL INSTITUTE IS THU S ALLOWED. FURTHER OBJECTION OF DISSOLUTION CLAUSE HAS ALSO BE EN MET WITH BY THE ASSESSEE. THE COMMISSIONER OF INCOME TAX SHALL THUS PASS CONSEQUENTIAL ORDER OF REGISTRATION UNDER SECTION 1 2AA OF THE ACT TO THE ASSESSEE SOCIETY. THE PLEA OF THE REVENUE T HAT IT WAS ENGAGED IN OTHER OBJECTS BEING DISTRIBUTIVE AND NOT CHARITABLE IS PREMATURE AS NO SUCH OBJECTS CARRIED ON BY THE ASSE SSEE, HAD BEEN BROUGHT TO OUR NOTICE. THE GROUNDS OF APPEAL RAISE D BY THE ASSESSEE ARE ALLOWED. 9. NOW COMING TO THE FACTS OF THE PRESENT CASE, THE AIMS AND OBJECTS OF THE ASSESSEE TRUST ARE AS UNDER: (A) TO PROMOTE THE EDUCATION, MENTAL, SOCIAL AND PH YSICAL WELL BEING OF CHILDRENS. (B) TO PRODUCE PHYSICALLY SOUND, MENTALLY ALERT AND SOCIALLY WELL ADJUSTED CHILDREN THE NATION BUILDERS OF TOMORROW. (C) TO RUN EDUCATIONAL AND PROFESSIONAL INSTITUTION S, LIBRARIES HOSTALS AND HOSPITALS AND TO DO ALL SUCH THING WHIC H ARE CONSIDERED APPROPRIATE TO HELD THE CAUSE GIVEN ABOV E. 10. THE COPIES OF MEMORANDUM AND BYLAWS OF ASSESSEE S SOCIETY ARE PLACED AT PAGES 1 TO 7 OF THE PAPER BOOK. IN FURTH ERANCE TO ITS OBJECTS, THE ASSESSEE WAS RUNNING TWO SCHOOLS I.E. SARASWATI MODEL SCHOOL FROM 1 ST TO 5 TH CLASS AND OTHER AS SARASWATI VIDYA MANDIR SENIOR S ECONDARY SCHOOL FROM 6 TH TO 12 TH CLASS. THE ASSESSEE IS AFFILIATED WITH THE GOVERNMENT OF HARYANA TO PROVIDE EDUCATION AND THE COPY OF THE CERTIFICATE OF AFFILIATION IS PLACED AT PAGE 8 OF T HE PAPER BOOK. THE ASSESSEE IS ADMITTEDLY RUNNING THE SAID SCHOOLS FOR THE PAST SEVERAL YEARS AND HAS BEEN PROVIDING EDUCATION TO THE STUDENTS, W HICH OBJECT IS RECOGNIZED AS CHARITABLE OBJECT UNDER SECTION 2(15) OF THE ACT. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES WHERE THE ASSESSEE IS 7 PROVIDING EDUCATION BY WAY OF RUNNING TWO SCHOOLS W ITHIN THE STATE OF HARYANA, THE LIMITED ISSUE WHICH HAD TO BE ADDRESSE D BY THE COMMISSIONER OF INCOME TAX WHILE DEALING WITH THE A PPLICATION FILED UNDER SECTION 12A OF THE ACT WAS TO VERIFY THE AIMS AND OBJECTS OF THE ASSESSEE TRUST, WHETHER THE SAME WERE CHARITABLE IN NATURE AND ALSO TO VERIFY THE GENUINENESS OF THE ACTIVITIES. AS NOTED BY US, THE ASSESSEE WAS CARRYING ON ONE OF THE OBJECTS WHICH ARE CHARIT ABLE IN NATURE I.E. WAS PROVIDING EDUCATION AND WAS RUNNING THE SAID SCHOOL S FOR THE PAST SEVERAL YEARS AND AS SUCH, THE ACTIVITIES OF THE AS SESSEE SOCIETY WERE GENUINE IN NATURE. IN THE ABOVE SAID CIRCUMSTANCES , WE FIND NO MERIT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 12AA OF THE ACT IN DENYING THE REGISTRATION TO THE ASSES SEE SOCIETY. AT THE TIME OF GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT THE FACT OF ASSESSEE HAVING UTILIZED OR NOT UTILIZED 85% OF ITS RECEIPTS TOWARDS CHARITABLE OBJECTS IS PRE-MATURE AS THE SAME IS TO BE SEEN BY THE ASSESSING OFFICER WHILE GRANTING EXEMPTION UNDER SE CTION 11/12 OF THE ACT. IN THE TOTALITY OF THE ABOVE FACTS AND CIRCUM STANCES OF THE CASE WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITIES BELO W AND REVERSING THE SAME, WE DIRECT THE ASSESSING OFFICER TO RECOGNIZE THE ASSESSEE AS CHARITABLE TRUST AND PASS CONSEQUENT ORDER UNDER SE CTION 12AA OF THE ACT. THE GROUND OF APPEAL RAISED BY THE ASSESSEE I S THUS ALLOWED. THE APPEAL OF THE ASSESSEE IN ITA NO.1070/CHD/2013 IS A LLOWED. 11. NOW COMING TO THE APPEAL IN ITA NO.1069/CHD/201 3. THE COMMISSIONER OF INCOME TAX HAD DENIED REGISTRATION UNDER SECTION 80G(5) OF THE ACT IN VIEW OF APPLICATION OF RECEIPT S BEING LESS THAN 85% OF THE GROSS RECEIPTS. HOWEVER, IN VIEW OF OUR ORD ER GRANTING REGISTRATION TO THE ASSESSEE UNDER SECTION 12A OF T HE ACT AND OUR OBSERVATIONS IN THIS ORDER, THE FACTUM OF APPLICATI ON OF RECEIPTS TO THE 8 EXTENT OF 85% OF THE GROSS RECEIPTS IS NOT TO BE CO NSIDERED WHILE GRANTING RECOGNITION UNDER SECTION 80G(5) OF THE AC T. WE FIND NO MERIT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX IN T HIS REGARD. IN VIEW OF OUR GRANTING REGISTRATION UNDER SECTION 12A OF T HE ACT TO THE ASSESSEE TRUST WE DIRECT THE COMMISSIONER OF INCOME TAX TO V ERIFY THE CLAIM OF THE ASSESSEE UNDER SECTION 80G(5) OF THE ACT AND IN CASE THE CONDITIONS PRESCRIBED UNDER SECTION 80G(5) OF THE ACT ARE SATI SFIED BY THE ASSESSEE, THEN RECOGNITION UNDER SECTION 80G(5) OF THE ACT MA Y BE ALLOWED TO THE ASSESSEE. REASONABLE OPPORTUNITY OF HEARING SHALL BE AFFORDED TO THE ASSESSEE. THE GROUND OF APPEAL RAISED BY THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSES. THE APPEAL IN ITA NO.1069/CH D/2013 IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL IN ITA NO.1069/CHD/20 13 IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL IN ITA NO.1070/ CHD/2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JANUARY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17 TH JANUARY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH