Kunti Naman Pharma & Technology Science Society, Haridwar V. CIT, Dehradun

ITA 114/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7034 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-10-2016
• Assessment Year: misc
• Appeal Filed On: 06-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard; Question of law; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 12A; 12AA; 205; 264; 13; 10(23C)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A.NO.114/DEL/2014 A.Y. : ------------ KUNTI NAMAN PHARMA & TECHNOLOGY SCIENCE SOCIETY C/O ANIL ASHOK & ASSOCIATES, CHARTERED ACCOUNTANTS, 1 ST FLOOR, VERMA SWEETS, ARYA NAGAR, JWALAPUR, HARIDWAR (UTTARAKHAND) (PAN: AAATK9002E) VS. COMMISSIONER OF INCOME TAX, DEHRADUN (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PIYUSH KAUSHIK, ADV. DEPARTMENT BY : MS. RACHNA SINGH, CIT(DR) ORDER PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 17/10/2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX, DEHRADUN ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW, THE CIT HAS GROSSLY ERRED IN DENYING REGISTRATION TO THE ASSESSEE SOCIETY U/S. 12A(A) OF THE INCOME TAX ACT, 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW, THE CIT HAS GROSSLY ERRED IN FAILING TO APPRECIATE THAT THE ASSEESSEE SOCIETY HAS BEEN INCORPORATED ESSENTIALLY FOR THE PURPOSE OF PROVIDI NG EDUCATION WHICH IS PER SE A CHARITABLE PURPOSE AND 2 THAT THE ENTIRE INCOME IS WHOLLY AND EXCLUSIVELY DEDICATED FOR THE PURPOSE OF SOCIETY WITHOUT EVEN A SINGLE RUPEE DISTRIBUTION ON ACCOUNT OF PROFITS TO ITS MEMBERS CLEARLY ENTITLING THE SOCIETY FOR REGISTRAT ION IN ACCORDANCE WITH THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF AMERICAN HOTEL & LODGING EDUCATIONAL INSTITUTE VS. CBDT 301 ITR 86 SC & OTH ER DECISION, INTER ALIA, FROM HONBLE SUPREME COURT. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND / OR AMEND, MODIFY OR WITHDRAW THE GROUNDS OUTLINED ABOV E BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPLI CANT FILED AN APPLICATION FOR REGISTRATION U/S. 12A(A) DATED NIL ON 8.4.2013 BEFO RE THE LD. CIT, DEHRADUN. ACCORDINGLY, THE ASSESSEE WAS SERVED THE NOTICE DATED 25.4.2013 BY THE LD. CIT FOR FURNISHING THE FOLLOWING INFORMA TION / DETAILS ON 6.5.2013. 1. DETAILS REGARDING TRUST MEMBERS WHERE PAN IS NOT AVAILABLE, WARD/DESIGNATION OF THE ASSESSING OFFICER UNDER WHO SE JURISDICTION ASSESSEE'S ADDRESS FALLS. 2. COPY OF MINUTES OF THE LAST BOARD MEETING OF THE TRUST. 3. UPDATED COPY OF BANK ACCOUNT OF THE TRUST FOR TH E LAST 3 YEARS OR FROM THE DATE OF OPENING OF THE ACCOUNT WHERE THE ACCOUN TS ARE LESS THAN THREE YEARS OLD . 4. NAMES, ADDRESSES AND PAN NOS. OF THE DONORS OF RS.25,OOO/- AND ABOVE. WHERE PAN OF THE DONOR IS NOT AVAILABLE, WAR D/DESIGNATION OF THE ASSESSING OFFICER HAVING TERRITORIAL JURISDICTION O VER THE CASE. 5. COPY OF PAN/I.T. RETURN OF THE SOCIETY/TRUST. 6. ORIGINAL COPY OF REGISTRATION CERTIFICATE, MEMOR ANDUM OF ASSOCIATION & RULE & REGULATION FOR VERIFICATION. 3 7. EVIDENCE TO SUBSTANTIATE THAT ANY CHARITABLE WOR K HAS SO FAR BEEN DONE BY THE SOCIETY /TRUST. 8. MINUTES BOOK, BOOKS OF ACCOUNT I.E, CASH BOOK, L EDGER & VOUCHER OF EXPENSES FOR VERIFICATION FOR THE LAST THREE YEARS. 9. NOTES ON ACTIVITIES WITH THE QUANTUM OF EXPENDIT URE INCURRED ON DIFFERENT CHARITABLE ACTIVITIES . 10. COPY OF DECLARATION U/S. 13(1) & 13(1)(D). 11. COPY OF AUDITED ACCOUNTS/RECEIPT AND PAYMENT A CCOUNT FOR THE LAST THREE YEARS OR WHICHEVER, IS APPLICABLE. ' 2.1 IN RESPONSE TO THE ABOVE NOTICE, ASSESSEES AR ATTENDED THE PROCEEDING FROM TIME TO TIME AND HE STATED THAT ASSESSEE THAT TWO INSTITUTES ARE BEING RUN UNDER THE SOCIETY NAMELY KUNTI NAMAN INSTITUTE OF PHARMA TECHNOLOGY AND SCIENCE AND KUNTI NAMAN INSTITUTE OF MANAGEMEN T AND TECHNOLOGY. 2.2 THE ABOVE INSTITUTES ARE RUNNING UNDER THE PUNJ AB TECHNICAL UNIVERSITY AND UTTRAKHAND OPEN UNIVERSITY. LD. CIT HAS OBSERVED THAT IT WAS CLARIFIED THAT NO CHARITABLE ACTIVITY WAS BEING UNDERTAKEN BY THE SOCIETY BUT SINCE EDUCATION ITSELF QUALIFIES FOR EXEMPTION BEING A CHARITABLE ACTIVITY, THE SOCIETY QUALIFIES FOR THE SAME. THE COUNSEL WAS ASKED WHETHER THERE WERE SOME NEEDY STUDENTS WHO WERE BEING CHARGED LES S THAN THE NORMAL FEE OR WERE BEING IMPARTED EDUCATION FREE OF COST. THE ANSWER WAS IN THE NEGATIVE. THE ASSERTION OF THE LD. COUNSEL IGNORES THE FACTS THAT SECTION 2(15) OF THE I.T. ACT,1961 DEFINES CHARITABLE PURPOSE AND WITHOUT ANY CHARITY BEING ESTABLISHED EVEN THE RUNNING OF AN EDUCATIONA L INSTITUTE WILL NOT ENTITLE THE APPLICANT FOR REGISTRATION. APPLICATION FILED BY THE ASSESSEE, REPLIES FURNISHED, BALANCE SHEET AND INCOME & EXPEN DITURE ACCOUNT HAVE BEEN CAREFULLY GONE THROUGH. THE OBJECTS OF THE TRU ST HAVE ALSO BEEN PERUSED. 2.3 A PERUSAL OF THE ABOVE MATERIAL, HOWEVER, BRIN GS OUT THAT THE TRUST IS APPARENTLY A COMMERCIAL INSTITUTE, ENGAGED IN SALE OF EDUCATION AND THE BUSINESS IS EXPANDING YEAR AFTER YEAR. THERE IS INC REASE IN CAPITAL 4 EXPENDITURE ALSO WHICH SHOWS THAT THE SOCIETY IS EN GAGED IN EXPANSION AND INCREASING RECEIPTS RATHER THAN CONCENTRATING ON TH E OBJECTIVE OF IMPARTING EDUCATION WHILE CORRELATING IT WITH THE SPIRIT BEHI ND THE LEGISLATION GRANTING EXEMPTIONS WHICH IS BOLD AND CLEAR I.E. 'CHARITY'. THE ACTIVITIES OF THE SOCIETY ARE COMMERCIAL IN CHARACTER AND NOT CHARITABLE PREC ISELY AS CONCLUDED BY THE HON'BLE HIGH COURT OF UTTARAKHAND ON SIMILAR FA CTS IN THE CASE OF CIT VS. QUEENS EDUCATION SOCIETY REPORTED IN 177 TAXMAN 321. 2.4 FURTHER, IN THE CASE OF NATIONAL INSTITUTE OF AERONAUTICAL ENGINEERING EDUCATIONAL SOCIETY VS. CIT (2009) 184 TAXMAN 264 ( UTTARAKHAND) IT WAS OBSERVED THAT CHARITY IS THE SOUL OF THE EXPRESSION 'CHARITABLE PURPOSE' AS DEFINED IN SECTION 2(15) OF THE I.T ACT. MERE TRADE OR COMMERCE IN THE NAME OF EDUCATION CANNOT BE SAID TO BE A CHARITABLE PURP OSE. THE UTTARAKHAND HIGH COURT 'HELD THAT THE CIT WAS CORRECT IN REJECT ING THE SECTION 12AA APPLICATION AS THE SOCIETY WAS CHARGING SUBSTANTIAL FEES, FROM THE STUDENTS AND MAKING HUGE' PROFITS. TO QUOTE THE HON'BLE HIGH COURT 'THE EXPRESSION 'NOT INVOLVING CARRYING ON OF ANY ACTIVITY FOR PROF IT' CANNOT BE READ WITH EXPRESSION 'EDUCATION', BUT THAT DOES NOT MAKE EVER Y KIND OF PURE. COMMERCIAL ACTIVITY IN THE NAME OF EDUCATION A CHAR ITABLE ONE. THEREFORE, ASSESSEE'S CASE IS A CLEAR CASE OF SALE OF EDUCATIO N, AND THEREFORE, IT COULD NOT BE CONSIDERED AS A CHARITABLE INSTITUTION U/S 2 (15) BECAUSE THE PURPOSE OF THE ORGANIZATION AS A WHOLE IS TO MAKE PROFIT. 2.5 KEEPING IN VIEW THE ABOVE FACTS AND DISCUSSION , THE APPLICATION FILED BY THE SOCIETY FOR REGISTRATION U/S. 12A(A) WAS REJ ECTED BY THE LD. CIT, DEHRADUN VIDE ORDER DATED 17.10.2013. 3. AGGRIEVED WITH THE AFORESAID ORDER DATED 17.10.2 013 ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. DURING THE HEARING, LD. COUNSEL OF THE ASSESSE E FILED A PAPER BOOK CONTAINING PAGES 1 TO 56 HAVING THE COPY OF APPLIC ATION IN FORM 10A FOR REGISTRATION, AUDITED ACCOUNTS FOR FY 2011-12, FY 2 010-11 & FY 2009-10; SUBMISSION DATED 2.9.2013 BEFORE THE CIT; DETAILS I N LAB EQUIPMENTS; DETAILS OF FEE STRUCTURE; ACCREDITATION CERTIFICATE S FROM PUNJAB TECHNICAL 5 UNIVERSITY AND GARHWAL UNIVERSITY UTTARAKHAND; SUBM ISSION DATED 14.8.2013 BEFORE THE CIT ALONGWITH THE ENCLOSURES; SUBMISSION DATED 23.8.2013 BEFORE THE CIT ALONGWITH ENCLOSURES; REGI STRATION CERTIFICATE UNDER SOCIETIES REGISTRATION ACT, 1860; MEMORANDUM & ARTICLES OF ASSOCIATION OF SOCIETY; ORDER U/S. 12AA OF CIT IN T HE CASE OF SHREE BALAJI EDUCATIONAL TUST FRAMING IDENTICAL REASONS FOR DENI AL OF REGISTRATION U/S. 12A AND DECISION OF DELHI ITAT IN THE CASE OF SHREE BALAJI EDUCATIONAL TRUST VS. CIT DATED 18.3.2016 IN ITA NO. 877/14 UNDER EXA CTLY IDENTICAL CIRCUMSTANCES DULY RELIED UPON. HE FURTHER FILED T HE COPY OF THE TRUE TRANSLATED COPY OF AIMS AND OBJECTIVES OF ASSESSEE SOCIETY AND TRUE TRANSLATED COPY OF AIMS AND OBJECTIVES OF SHREE BAL AJI EDUCATIONAL TRUST. THEREFORE, HE REQUESTED THAT FOLLOWING THE DECISION OF THE ITAT IN THE CASE OF BALAJI EDUCATIONAL TRUST (SUPRA) THE ISSUE IN DISPU TE MAY BE DECIDED IN FAVOR OF THE ASSESSEE AND APPEAL FILED BY THE ASSE SSEE MAY BE ALLOWED. 4.1 AT THE TIME OF HEARING LD. DR RELIED UPON THE O RDERS OF THE LOWER AUTHORITIES AND PLACED RELIANCE UPON THE DECISION O F THE HONBLE UTTARAKHAND DECISION IN THE CASE OF CIT VS. NATIONA L INSTITUTE OF AERONAUTICAL ENGINEERING EDUCATIONAL SOCIETY (UTTAR AKHAND). 5. WE HAVE HEARD THE BOTH PARTIES AND PERUSED AN D CONSIDERED THE RELEVANT RECORDS AVAILABLE WITH ME ESPECIALLY THE I MPUGNED ORDERS PASSED BY THE REVENUE AUTHORITIES, COPY OF THE ORDER PASSED U/S. 12AA OF THE CIT IN THE CASE OF SHREE BALAJI EDUCATIONAL TRUST FRAMING IDENTICAL REASONS FOR DENIAL OF REGISTRATION U/S. 12A AND THE ITAT, DELHI DECISION DATED 18.3.2016 PASSED IN THE CASE OF SHREE BALAJI EDUCATIONAL TRUS T VS. CIT IN ITA NO. 877/14. WE HAVE ALSO PERUSED THE TRUE TRANSLATED COPY OF AIMS AND OBJECTIVES OF THE ASSESSEE SOCIETY AND TRUE COPY O F AIMS AND OBJECTIVES OF SHREE BALAJI EDUCATIONAL TRUST AS CONSIDERED BY TH E COORDINATE BENCH OF ITAT IN THE CASE OF SHREE BALAJI EDUCATIONAL TRUST VS. CIT VIDE DECISION DATED 18.3.2016 IN ITA NO. 877/14 UNDER EXACTLY IDE NTICAL CIRCUMSTANCES. 6 FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING OR DER OF ITAT, DELHI IN THE CASE OF SHREE BALAJI TRUST VS. CIT DATED 18.3.2016 IN ITA NO. 877/14 UNDER EXACTLY IDENTICAL CIRCUMSTANCES, AS UNDER:- 3. THE LD COUNSEL FURTHER POINTED OUT THAT THE CIT( E) HAS FRAMED TWO REASONS FOR REFUSING TO GRANT REGISTRATI ON UNDER SECTION 12A OF THE ACT VIZ. FIRST THAT THE EDUCATIO N SHOULD BE GIVEN FREE OF COST TO SOME NEEDY STUDENTS AND SECON D THE ASSESSEE IS EXPENDING AND INCREASING ITS RECEIPTS T HEREFORE NOT ENTITLED FOR REGISTRATION. THE LD COUNSEL OF TH E ASSESSEE VEHEMENTLY POINTED OUT THAT AS PER AMENDED PROVISIO N OF SECTION 2(15) OF THE ACT THE EXPRESSION CHARITABLE PURPOSE INCLUDES RELIEF TO THE POOR, EDUCATION, YOGA, MEDIC AL RELIEF, PRESERVATION OF ENVIRONMENT & MONUMENTS AND ADVANCEMENT OF OTHER OBJECT OF THE GENERAL PUBLIC U TILITY AND THESE INDEPENDENT TERMS USED BY THE LEGISLATION HAVE INDEPENDENT MEANING AND EDUCATION PER-SE IS CHARITA BLE PURPOSE. THE LD COUNSEL OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF ITAT DELHI IN THE CASE OF SHAVAK SHIKSHA SIMITI VS CIT 104 TTJ 127 (DELHI) AND SUBMI TTED THAT THERE IS NO DISPUTE THAT EDUCATION PER-SE AS A CHARITABLE PURPOSE JUST LIKE RELIEF TO POOR OR MEDI CAL RELIEF. 4. THE LD COUNSEL FURTHER PLACING RELIANCE ON THE D ECISIONS OF HONBLE SUPREME COURT IN THE CASE OF ADDL. CIT VS. SURAT ART SILK CLOTH MANUFACTURES ASSOCIATION [1980 121 I TR I (SC), ADITANAR EDUCATIONAL INSTITUTION VS. ADDL. CI T [1997 224 ITR 310 (SC) AND AMERICAN HOTEL AND LODGING ASSOCIATION EDUCATIONAL INSTITUTE VS. CBDT [2008 30 1 ITR 86 (SC) SUBMITTED IT IS CLEAR THAT WHEN A SURPLUS I S PLOUGHED FOR EDUCATIONAL PURPOSES THE EDUCATIONAL 7 INSTITUTION EXISTS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT. THE LD COUNSEL LASTLY POINT ED OUT THAT RECENTLY THE HONBLE SUPREME COURT IN ITS DECI SION IN THE CASE OF QUEENS EDUCATIONAL SOCIETY VS CIT (201 5) 372 ITR 699 (SC) REVERSING THE DECISION OF UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS QUEENS EDUCATIONAL SOCI ETY AND OTHER SIMILAR DECISION AS RELIED BY CIT IN THE IMPU GNED ORDER HAS CLEARLY HELD THAT WHERE AN EDUCATIONAL IN STITUTION CARRIES ON ACTIVITY OF EDUCATION PRIMARILY FOR EDUC ATING PERSONS THE FACT THAT IT DOES MAKES A SURPLUS DOES NOT LEAD TO A CONCLUSION THAT IT CEASES TO EXIST SOLELY FOR EDUCATIONAL PURPOSES AND BECOMES AN INSTITUTION FOR THE PURPOSE OF MAKING PROFIT. REVERSING THE DECISION OF UTTARAKHAN D HIGH COURT IT HAS BEEN HELD BY SUPREME COURT IN THIS DEC ISION THAT WHEN A SURPLUS IS PLOUGHED BACK FOR EDUCATIONA L PURPOSES THE EDUCATIONAL INSTITUTION EXISTS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSES OF PR OFIT. 5. REPLYING TO THE ABOVE THE LD DR SUPPORTED THE IM PUGNED ORDER AND SUBMITTED THAT IN THE CASE OF NATIONAL IN STITUTE OF AERONAUTICAL ENGINEERING EDUCATIONAL SOCIETY VS. CI T (2009) 184 TAXMAN 264 (UTTARAKHAND) IT WAS OBSERVED THAT CHARITY IS THE SOUL OF THE EXPRESSION CHARI TABLE PURPOSE AS DEFINED IN SECTION 2(15) OF THE I.T.ACT . MERE TRADE OR COMMERCE IN THE NAME OF EDUCATION CANNOT B E SAID TO BE A CHARITABLE. NO OTHER ARGUMENT WAS SUBMITTED BY THE LD DR. 6. PLACING REJOINDER TO THE ABOVE SUBMISSIONS OF TH E REVENUE THE LD COUNSEL AGAIN PLACED HIS RELIANCE ON THE REC ENT DECISION OF HONBLE APEX COURT IN THE CASE OF QUEEN S 8 EDUCATIONAL SOCIETY VS CIT (SUPRA) AND SUBMITTED TH AT THE HONBLE SUPREME COURT REVERSING THE DECISION OF HON BLE UTTARAKHAND HIGH COURT HAS HELD THAT WHEN A SURPLUS IS PLOUGHED BACK FOR EDUCATIONAL PURPOSES THEN IT CANN OT BE SAID THAT THE INSTITUTION EXIST FOR PROFIT MOTIVE. THE LD COUNSEL POINTED OUT THAT THE CIT(E) HAS NOT BROUGHT OUT ANY ALLEGATION TO SHOW THAT THE SURPLUS OF RECEIPT WAS MISUSED OR USED OTHER THEN THE EDUCATIONAL PURPOSES AND AGA INST THE OBJECT OF THE SOCIETY. 7. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS AND PERUSAL OF THE IMPUGNED ORDER AND RELEVANT RECORD W E NOTE THAT THE CIT(E) HAS NOT BROUGHT OUT ANY ALLEGATION TO SHOW THAT THE RECEIPT/INCOME OF THE ASSESSEES TRUST WAS NOT USED FOR THE EDUCATIONAL PURPOSES AND THE SAME WAS USED FOR OTHER PURPOSES BEYOND THE OBJECTIVES OF THE APP LICANT TRUST. IT IS ALSO PERTINENT TO NOTE THAT THE REASON S RECORDED BY THE CIT(E) THAT THE EDUCATION SHOULD BE GIVEN FR EE OF COST TO SOME NEEDY STUDENTS AND APPLICANT IS EXPENDING A ND INCREASING ITS RECEIPTS IS NOT A CRITERIA OR RELEVA NT FACT FOR GATHERING SATISFACTION AS REQUIRED UNDER SECTION 12 A OF THE ACT FOR GRANT OF REGISTRATION UNDER SAID PROVISION. THE CIT HAS RELIED ON THE DECISION OF HONBLE UTTARAKHAND H IGH COURT IN THE CASE OF CIT VS QUEENS EDUCATIONAL SOCI ETY REPORTED AS 177 TAXMAN 321 BUT WE RESPECTFULLY NOTE THAT THIS DECISION HAS BEEN REVERSED BY HONBLE SUPREME COURT IN THE CASE OF QUEEN EDUCATIONAL SOCIETY VS CIT (SU PRA) WHEREIN THEIR LORDSHIP HELD THAT WHEN THE SURPLUSES OF A EDUCATIONAL INSTITUTION HAS BEEN USED FOR EDUCATION AL PURPOSES THEN IT SHOULD BE HELD THAT THE EDUCATIONA L INSTITUTION EXISTS SOLELY FOR EDUCATIONAL PURPOSES. WE MAY POINTED OUT THAT MERELY BECAUSE THE APPLICANT TRUST IS 9 INCREASING ITS ASSETS AND RECEIPTS DOES NOT IPSO- F ACTO ESTABLISHED THAT THE APPLICANT TRUST EXISTS FOR THE PURPOSES OF PROFIT AND CARRIED OUT EDUCATIONAL ACTIVITIES WI TH A PROFIT MOTIVE IN THE NATURE OF TRADE COMMERCE OR BUSINESS AS PROVIDED IN THE AMENDMENT PROVISION OF SECTION 2(15 ) OF THE ACT. 8. AT THIS STAGE IT IS RELEVANT TO TAKE COGNIZANCE OF DECISION/ORDER OF ITAT DELHI D BENCH IN THE CASE OF JK EDUCATION SAMITI VS CIT, ROHTAK DATED 20.05.2015 PA SSED IN ITA NO. 6251/DELHI/2013, AS RELIED BY THE LD COU NSEL OF THE ASSESSEE, WHEREIN IT WAS HELD THUS: WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT SECTION 12AA DEALS WITH THE PROCEDURE FOR REGISTRATION WHICH INT ER ALIA PROVIDES THAT ON AN APPLICATION FILED BY ASSESSEE, THE COMMISSIONER OF INCOME TAX WILL MAKE CERTAIN QUERIE S AS HE MAY DEEM NECESSARY IN THIS RESPECT AND AFTER GET TING SATISFIED ABOUT THE OBJECTS OF THE SOCIETY/INSTITUT ION AND THE GENUINENESS OF ACTIVITIES, HE SHALL PASS AN ORDER I N WRITING REGISTERING THE INSTITUTION OR ON NON SATISFACTION, REFUSING THE REGISTRATION THEREOF AS THE CASE MAY BE. HOWEVE R, BEFORE PASSING ORDER FOR REFUSAL OF REGISTRATION, T HE ASSESSEE WILL BE PROVIDED REASONABLE OPPORTUNITY OF BEING HEARD. THEREFORE, FROM THE ABOVE PROVISION OF LAW, WE FIND THAT AT THE TIME OF REGISTRATION U/S 12AA, THE COMM ISSIONER IS ONLY REQUIRED TO EXAMINE THE OBJECTS OF THE SOCI ETY / INSTITUTION AS WELL AS GENUINENESS OF ACTIVITIES OF THE ASSESSEE AND IF HE FINDS THAT THE OBJECTS OF THE SO CIETY ARE CHARITABLE, AND THE ACTIVITIES AS STATED IN THE OBJ ECT CLAUSE OF THE SOCIETY ARE BEING CARRIED OUT, THEN HE IS BO UND TO 10 GRANT REGISTRATION U/S 12AA OF THE ACT. HON'BLE HIG H COURT OF UTTARAKHAND AS RELIED UPON BY LD. D.R. IN THE CA SE OF CIT VS NATIONAL INSTITUTE OF AERONAUTICS AND EDUCAT ION 181 TAXMAN 205 HAS HELD THAT WHERE THE ASSESSEE WAS EARNING PROFITS BY CHARGING HEFTY FEES, THE ASSESSE E CANNOT BE SAID TO BE ENGAGED IN CHARITABLE ACTIVITIES AND WAS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. HOWE VER, THE HON'BLE SUPREME COURT IN THE CASE OF QUEENS' EDUCAT IONAL SOCIETY VS CIT 245 CTR 449 HAS HELD THAT MERE EARNI NG OF PROFIT CANNOT BE THE REASON FOR NOT ALLOWING REGIST RATION UNDER THE PROVISIONS OF SECTION 12AA. THE FINDINGS OF HON'BLE SUPREME COURT AS CONTAINED IN PARA 19 ARE REPRODUCED BELOW: 'IT IS CLEAR, THEREFORE, THAT THE UTTARAKHAND HIGH COURT HAS ERRED BY QUOTING A NON-EXISTENT PASSAGE F ROM AN APPLICABLE JUDGMENT, NAMELY, ADITANAR AND QUOTING A PORTION OF A PROPERTY TAX JUDGMENT WHICH EXPRESSLY STATED AT RULINGS ARISING OUT OF THE INCOME TAX ACT WOULD NOT BE APPLICABLE. QUITE APART FROM THIS, IT ALSO WENT ON TO FURTHER QUOTE FROM A PORTION OF THE SAID PROPERTY TAX JUDGM ENT WHICH WAS RENDERED IN THE CONTEXT OF WHETHER AN EDUCATIONAL SOCIETY IS SUPPORTED WHOLLY OR IN PART BY VOLUNTARY CONTRIBUTIONS, SOMETHING WHICH IS COMPLET ELY FOREIGN TO SECTION 10(23C) (IIIAD). THE FINAL CONCL USION THAT IF A SURPLUS IS MADE BY AN EDUCATIONAL SOCIETY AND PLO UGHED BACK TO CONSTRUCT ITS OWN PREMISES WOULD FALL FOUL OF SECTION 10(23C) IS TO IGNORE THE LANGUAGE OF THE SEC 'ON AN D TO IGNORE THE TESTS LAID DOWN IN THE SURAT ART SILK CL OTH CASE, ADITANAR CASE AND THE AMERICAN HOTEL AND LODGING CA SE. IT IS CLEAR THAT WHEN A SURPLUS IS PLOUGHED BACK FOR EDUCATIONAL PURPOSES, THE EDUCATIONAL INSTITUTION E XISTS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF 11 PROFIT. IN FACT, IN S.RM.M.CT.M. TIRUPPANI TRUST V. COMMISSIONER OF INCOME TAX, (1998) 2 SCC 584, THIS COURT IN THE CONTEXT OF BENEFIT CLAIMED UNDER SECTION 11 OF THE ACT HELD' 6. THOUGH, THE ABOVE FINDINGS OF HON'BLE SUPREME CO URT ARE WITH REFERENCE TO SECTION 10(23C)(IIIAD) AND NOT IN RESP ECT OF SECTION 11 AND 12 YET THE RATIO OF DECISION IS THAT MERE EARNING OF PROFIT IN THE COURSE OF CARRYING OUT CHA RITABLE ACTIVITIES CANNOT BE A REASON FOR NOT GRANTING REGI STRATION U/S 12AA OF THE ACT. 7. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT BHATINDA VS BABA DEEP SINGH EDUCATIONAL SOCIETY VID E ORDER DATED 13.10.2011 HAS HELD THAT THE JURISDICTI ON OF THE COMMISSIONER AT THE STAGE OF PROCESSING APPLICATION U/S 12AA OF THE ACT IS TO EXAMINE THE GENUINENESS OF TH E OBJECTS OF THE TRUST, WHETHER THEY ARE GENUINE AND IN CONSONANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION AND WHERE EDUCATION IS BEING IMPARTED AS PER THE RULES AND THE FACTUM OF THE ESTABLISHMENT AND RUNNING OF SCHOOLS IS NOT DISPUTED, THE SAME WAS A GENUINE ACTIVITY AND THE E NQUIRY REGARDING GENUINENESS OF THE ACTIVITIES CANNOT BE S TRETCHED BEYOND THIS. THE RELEVANT FINDINGS OF PUNJAB AND HA RYANA HIGH COURT ARE REPRODUCED AS UNDER: '2. THE RESPONDENT-SOCIETY APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFER RED TO AS 'THE. ACT') ON 31.3.2009. THE SAID APPLICATION W AS DECLINED BY THE COMMISSIONER OF INCOME TAX, BATHIND A (FOR SHORT 'THE CIT') VIDE ORDER DATED 25.9.2009. THE CI T CAME TO', THE CONCLUSION AFTER EXAMINING THE INCOME AND EXPENDITURE AND THE BALANCE SHEET FOR THE PERIOD EN DING ON 12 31.3.2006, 31.03.2007 AND 31.3.2008 THAT THE SOCIET Y HAD RECEIVED DONATIONS AND THE CAPACITY OF DONORS AND GENUINENESS OF TRANSACTIONS HAVE NOT BEEN EXPLAINED . THE CIT WHILE NOTICING THAT SOCIETY WAS RUNNING A POLYT ECHNIC COLLEGE FURTHER TOOK INTO CONSIDERATION THAT THE SO CIETY WAS EARNING PROFITS FOR THE LAST TWO YEAR AND HAD CLAIM ED EXEMPTION UNDER SECTION 10(23C) OF THE ACT. THE REA SONS TO SWITCH OVER TO SECTION 11 OF THE ACT REMAINED UNEXP LAINED FOR CLAIMING EXEMPTION UNDER SECTION 12AA OF THE AC T AND WHILE TAKING INTO CONSIDERATION SECTION 2 (15) OF T HE ACT THE CIT CAME TO THE CONCLUSION THAT SINCE THE SOCIETY W AS CHARGING BUILDING FUND, DEVELOPMENT FUND, SPORTS FU ND AND TRANSPORTATION COSTS ETC., THE SAME COULD NOT BE TE RMED AS CHARITABLE ACTIVITY BY ANY DEFINITION. 3. THE SOCIETY PREFERRED AN APPEAL BEFORE THE INCOM E TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR (HEREI NAFTER REFERRED TO AS 'THE TRIBUNAL') WHICH HAS ALLOWED TH E APPEAL OF THE SOCIETY AND HAS SET ASIDE THE ORDER PASSED B Y THE CIT AND DIRECTED THAT REGISTRATION APPLIED FOR BY T HE APPELLANT UNDER SECTION 12AA OF THE ACT BE GRANTED. THE PRESENT APPEAL IS DIRECTED AGAINST THE SAID ORDER A ND THE FOLLOWING QUESTIONS OF LAW HAVE BEEN FORMULATED BY THE REVENUE:- '1. WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ID. ITA T WAS RIGHT IN LAW TO RESTRICT THE POWERS OF TH E CIT FOR MAKING THE ENQUIRIES U/S 12AA(A) OF THE ACT DESPITE THE FACT THAT THE SAID SECTION PROVIDES THAT THE CIT CA N MAKE SUCH ENQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEH ALF. 2. WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ID. ITAT WAS RIGHT IN LAW IN GRANTING REGISTRATION TO T HE 13 ASSESSEE TRUST WHEN NO WORK OF RELIEF TO THE POOR I N THE FIELD OF EDUCATION WAS DONE AS PER DEFINITION OF 'C HARITABLE PURPOSES' PROVIDED U/S 2(15) OF THE ACT.' 4. THE TRIBUNAL WHILE ALLOWING THE APPEAL HAS NOTIC ED AT MEMORANDUM OF ASSOCIATION AND THE OBJECTS OF THE SO CIETY WAS TO DO CHARITABLE WORK, PROJECTS AND ACTIVITIES RELATING TO EDUCATION WHICH HAVE NOT BEEN CONSIDERED WHILE DECLINING THE APPLICATION UNDER SECTION 12AA OF THE ACT. IT WAS FURTHER HELD THAT THE CIT SHOULD HAVE ONLY SEEN THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY AND CI RCULAR NO.11/2008 DATED 19.12.2008 WAS ALSO REFERRED THAT THE PROVISIONS OF SECTION 2(15) OF THE ACT ARE NOT APPL ICABLE TO A SOCIETY. ACCORDINGLY, IT WAS HELD THAT NATURE AND S COPE AT THE STAGE OF GRANT OF REGISTRATION UNDER SECTION 12 AA OF THE ACT IS TO ONLY REGARDING THE OBJECTS OF THE SOCIETY . THE TRIBUNAL ALSO DISTINGUISHED THE PROVISIONS OF SECTI ONS 10(23C) AND 12AA OF THE ACT AND SCOPE OF THE SAID S ECTIONS AND HELD THAT IT WAS OPEN TO THE REVENUE AUTHORITIE S WHILE PROCESSING THE RETURN OF THE INCOME OF THOSE ASSESS EES TO EXAMINE THEIR CLAIM UNDER SECTIONS 11 AND 13 OF THE ACT AND GIVE SUCH TREATMENT TO THOSE SOCIETIES AS WARRA NTED BY THE FACTS OF THE CASE. THE POWER OF THE REVENUE AUT HORITIES TO CANCEL REGISTRATION UNDER SECTION 12AA (3) OF TH E ACT WAS ALSO TAKEN INTO CONSIDERATION ON THE GROUND THAT SA ME CAN BE RESORTED TO IF THE COMMISSIONER IS SATISFIED THA T THE ACTIVITY OF SUCH SOCIETY OR INSTITUTION ARE NOT GEN UINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE SOCIETY/INSTITUTION. 5. THE POWER OF THE CIT REGARDING THE SCOPE OF SECT ION 12AA OF THE ACT HAS BEEN CONSIDERED BY THIS COURT IN THE OR DER DATED 5.10.2011 PASSED IN CIT VS. SURYA EDUCATIONAL & CHARITABLE TRUST [2011] 203 TAXMAN 53/15 TAXMANN.CO M 14 123 (PUNJ. & HAR.) AND IT HAS BEEN HELD THAT SECTIO N 12AA OF THE ACT, REQUIRES SATISFACTION IN RESPECT OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, WHICH I NCLUDES THE ACTIVITIES WHICH THE TRUST WAS UNDERTAKING AT PRESENT AND ALSO WHICH IT MAY CONTEMPLATE TO UNDERTAKE. THE INSERTION OF SUB SECTION 3 TO SECTION 12AA OF THE A CT 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. 6. THE ALLAHABAD HIGH COURT IN CIT VS. RED ROSE SCH OOL [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 WHETHE R THE ACTIVITIES ARE GENUINE AND IN CONSONANCE WITH THE O BJECTS OF THE TRUST OR INSTITUTION AND WHERE EDUCATION IS BEI NG IMPARTED AS PER THE RULES AND THE FACTUM OF THE ESTABLISHMENT AND RUNNING OF SCHOOLS IS NOT DISPUTE D THE SAME WAS A GENUINE ACTIVITY AND THE ENQUIRY REGARDI NG GENUINENESS OF THE ACTIVITIES CANNOT BE STRETCHED B EYOND THIS. 7. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT WOU LD BE CLEAR THAT RESPONDENT-SOCIETY WHICH WAS ADMITTEDLY RUNNIN G A POLYTECHNIC 90LLEGE AND THE ACTIVITIES WERE INTERWO VEN FOR FURTHERING THE PROJECTS AND ACTIVITIES PERTAINING T O EDUCATION, THE TRIBUNAL RIGHTLY DIRECTED THAT REGIS TRATION SHOULD BE GRANTED TO THE RESPONDENT- SOCIETY WITH T HE RIDER THAT THE SAME COULD ALWAYS BE 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 WHI LE PROCESSING THE APPLICATION UNDER SECTION' 12AA OF T HE ACT WAS NOT TO ACT AS AN ASSESSING AUTHORITY AND THUS, THE 15 TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL FILED BY TH E SOCIETY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ACCORDINGLY, NO SUBSTANTIAL QUESTION OF LAW AS CONT ENDED IN THE PRESENT APPEAL ARISES FOR DETERMINATION BY THIS COURT AND THE ORDER DATED 31.3.2010 PASSED BY THE TRIBUNA L IS UPHELD. CONSEQUENTLY, THE APPEAL IS DISMISSED.' 8. SIMILARLY, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS O.P.JINDAL GLOBAL UNIVERSITY, I.T.A. NO. 190/2011 A ND 285/2012 DATED 2.5.2013, UNDER SIMILAR CIRCUMSTANCE S, HAS HELD AS UNDER: 'THEREFORE, THE OBJECT OF SECTION 12AA OF THE ACT, IS TO EXAMINE THE GENUINENESS OF THE OBJECTS OF THE TRUST , BUT NOT THE INCOME OF THE TRUST FOR CHARITABLE OR RELIGIOUS PURPOSES. THE STAGE FOR APPLICATION OF INCOME IS YET TO ARRIV E I.E. WHEN SUCH TRUSTS OR INSTITUTION FILES ITS RETURN. THEREF ORE, WE FIND THAT THE JUDGEMENT REFERRED TO BY THE LEARNED COUN SEL FOR THE APPELLANTS ARE NOT APPLICABLE TO THE FACTS OF T HE PRESENT CASE ARISING OUT OF THE QUESTION OF REGISTRATION OF THE TRUST AND NOT OF ASSESSMENT.' 9. IT IS AN UNDISPUTED FACT THAT ASSESSEE IS RUNNIN G EDUCATIONAL INSTITUTION AS IS APPARENT FROM THE ASS ESSMENT ORDER OF EARLIER YEARS PLACED AT PAPER BOOK PAGES 1 24-126 AND MOREOVER THE OBJECT CLAUSE AS PLACED IN PAPER B OOK PAGES 3-14 SUGGESTS THAT ASSESSEE IS RUNNING SCHOOL FOR EDUCATIONAL PURPOSES. THE ARGUMENT OF LD. D.R. THAT ORIGINAL CONSTITUTION NEEDS TO BE EXAMINED WITH RES PECT TO OBJECTS CLAUSE DOES NOT HOLD MUCH FORCE AS A.O. IN ASSESSMENT ORDERS OF EARLIER YEARS (AS PLACED IN PA PER BOOK PAGES 124-126) HAS NOTED THAT SOCIETY WAS RUNN ING A SCHOOL. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES AN D IN VIEW OF THE JUDGEMENTS AS NOTED ABOVE, WE DIRECT TH E 16 COMMISSIONER TO ALLOW REGISTRATION U/S 12AA OF THE ACT. THE A.O. DURING ASSESSMENT PROCEEDINGS WILL HOWEVER BE ENTITLED TO EXAMINE THE BOOKS OF ACCOUNTS OF ASSESS EE WITH A VIEW TO EXAMINE ANY VIOLATION OF THE ACT AND CAN DISALLOW EXEMPTION U/S 11 IF ANYTHING ADVERSE IS FOUND. 10. IN VIEW OF ABOVE, APPEAL FILED BY ASSESSEE IS A LLOWED. 9. ON THE BASIS OF FORGOING DISCUSSION WE REACH TO A FORTIFIED CONCLUSION THAT THE CIT DISMISSED APPLICATION OF TH E ASSESSEE FOR GRANT OF REGISTRATION UNDER SECTION 12 A OF THE ACT BY RECORDING INCORRECT AND IRRELEVANT FACTS AND CIRCUMSTANCES AND THE ASSESSEE SUCCESSFULLY ESTABLI SHED THAT IT WAS CREATED FOR THE CHARITABLE PURPOSES INC LUDING EDUCATION ACTIVITY AND IT USED ITS FUNDS FOR THE PU RPOSE OF EDUCATIONAL ACTIVITIES AND THEREFORE THE APPLICANT TRUST IS ELIGIBLE FOR REGISTRATION UNDER SECTION 12A OF THE ACT. 10. IT IS RELEVANT TO MENTION THAT GRANT OF REGISTR ATION UNDER SECTION 12A OF THE ACT DOES NOT AUTOMATICALLY MAKE ELIGIBLE THE APPLICANT FOR EXEMPTION UNDER SECTION 11 AND OT HER RELEVANT PROVISIONS OF THE ACT. DURING THE ASSESSME NT PROCEEDINGS WHILE CONSIDERING SUCH CLAIM OF ASSESSE E THE AO IS FULLY EMPOWERED TO EXAMINE AND VERIFY THESE F ACTS THAT WHETHER THE ASSESSEE/APPLICANT HAS APPLIED ITS RECEIPTS TOWARDS ITS CHARITABLE OBJECTS AND THE AO IS ALSO EMPOWERED TO VERIFY AS TO WHETHER THE APPLICANT ASS ESSEE IS CONDUCTING ANY ACTIVITY IN THE NAME OF CHARITABL E WHICH IS ACTUALLY IN THE NATURE OF TRADE COMMERCE OR BUSI NESS. THESE SOVEREIGN POWERS OF THE TAX AUTHORITIES ARE P ERPETUAL WHICH CANNOT BE TAKEN AWAY ONLY BY GRANT OF REGISTR ATION UNDER SECTION 12A OF THE ACT. IT IS ALSO RELEVANT T O MENTION THAT THE GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT MERELY A PRE-QUALIFICATION FOR CLAIMING EXEMPTION U NDER 17 SECTION 11 AND OTHER RELEVANT PROVISIONS OF THE ACT , WHICH SHOULD BE GRANTED BY RECORDING SATISFACTION AS REQU IRED UNDER THE SAID PROVISION. 11. FINALLY, WE HOLD THAT THE CIT DISMISSED APPLICA TION FOR REGISTRATION WITHOUT ANY JUSTIFIED REASON AND BY CONSIDERING INCORRECT AND IRRELEVANT FACTS AND THE LD. CIT(A) HAS NOT BROUGHT ANY ADVERSE FINDING ON RECORD TO SH OW THAT HE OBJECTS OF THE TRUST ARE NOT CHARITABLE OR NON G ENUINE. AT THE SAME TIME, WE NOTE THAT THE APPLICANT SUCCES SFULLY ESTABLISHED THAT IT WAS CREATED WITH CHARITABLE OBJ ECTS AND PURPOSES, ACTIVITIES ARE GENUINE AND IN CONSONANCE WITH THE CHARITABLE OBJECTS AND ALL RECEIPTS/INCOME SURP LUS IS BEING USED FOR EDUCATION PURPOSES. THEREFORE, WE SE T ASIDE THE IMPUGNED ORDER AND THUS CONCLUSION OF THE CIT I S DEMOLISHED. CONSEQUENTLY, THE CIT IS DIRECTED TO GR ANT REGISTRATION UNDER SECTION 12A OF THE ACT TO THE AP PLICANT TRUST. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN THE MANNER AS INDICATED ABOVE. 6. AFTER PERUSING THE AFORESAID ORDER OF THE TRIBUN AL IN THE CASE OF SHREE BALAJI EDUCATIONAL TRUST, COPY OF THE AIMS AND OBJE CTIVES OF THE ASSESSEE SOCIETY, COPY OF AIMS AND OBJECTIVES OF SHREE BALAJ I EDUCATIONAL TRUST, ORDER OF THE LD. CIT IN THE CASE OF THE ASSESSEE AND IN T HE CASE OF SHREE BALAJI EDUCATIONAL TRUST, WE NOTE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE PROVISIONS OF SOCIETIES REGISTRATION ACT, 1860. THE SOCIETY HAS BEEN INCORPORATED WITH THE MAIN OBJECTIVE OF PROVIDING EDUCATION AS NOTED IN THE IMPUGNED ORDER PASSED BY THE LD. CIT. WE ALSO NOTE THAT IT IS UNDISPUTED THAT THE ASSESSEE SOCIETY IS RUNNING THE TWO INSTI TUTES I.E. KUNTI NAMAN 18 INSTITUTE OF PHARMA TECHNOLOGY & SCIENCE AND KUNIT NAMAN INSTITUTE OF MANAGEMENT AND TECHNOLOGY FOR PROVIDING EDUCATION IN THE CURRICULUM OF BBA, BCA, MBA, MCA ETC. THESE INSTITUTES ARE AFFILI ATED TO PUNJAB TECHNICAL UNIVERSITY AND UTTARAKHAND OPEN UNIVERSIT Y. IT IS ALSO NOTED THAT THE FEE STRUCTURE CHARGED BY THE ASSESSEE IS VERY REASONABLE I.E. RS. 2000- 2500 PER MONTH FOR EVEN SPECIALIZED COURSE SUCH AS BBA, BCA, MSC ETC. WE ALSO NOTE THAT THE LD. CIT HAS FRAMED TWO REASONS F OR REFUSING TO GRANT REGISTRATION U/S. 12A I.E. FIRST NARRATED IN PARA N O. 2 IN HIS IMPUGNED ORDER THAT THE EDUCATION SHOULD BE GIVEN FREE OF COST TO SOME NEEDY STUDENTS AND THE SECOND REASON VIDE PARA NO. 4 THAT THE ASSESSEE IS EXPANDING AND IS INCREASING RECEIPTS, THEREFORE, NOT ENTITLED FOR EX EMPTION. WE ALSO NOTE THAT LD. CIT RELIED ON THE DECISION OF THE UTTARAKHAND H IGH COURT IN THE CASE OF CIT VS. QUEENS EDUCATIONAL 177 TAXMAN 321 AND ANOTH ER SIMILAR DECISION IN THE CASE OF NATIONAL INSTITUTE OF AERONAUTICAL E NGINEERING EDUCATIONAL SCOEITY VS. CIT 184 TAXMAN 264 WHICH HAVE BEEN SINC E BEEN REVERSED BY THE HONBLE SUPREME COURT VIDE DECISION IN THE CASE OF QUEENS EDUCATIONAL EDUCATIONAL SOCIETY VS. CIT (2015) 372 ITR 699 (SC) . IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE PRESENT CASE I S SQUARELY COVERED BY COORDINATE BENCH DECISION IN THE CASE OF SHREE BALA JI EDUCATIONAL TRUST VS. CIT DATED 18.3.2016 IN ITA NO. 877/DEL/2014 UNDER E XACTLY IDENTICAL FACTS AND CIRCUMSTANCES. THE COORDINATE BENCH IN THE BA LAJIS CASE (SUPRA) CLEARLY CONCURRED WITH THE SUBMISSION OF THE ASSESS EE TO THE EFFECT THAT EDUCATION IS PER SE A CHARITABLE OBJECT. TAKING N OTE OF THE FACT THAT THE DECISION AS RELIED UPON BY THE CIT HAVE BEEN REVERS ED BY THE SUPREME COURT IN ITS DECISION IN THE CASE OF QUEENS EDUCATIONAL S OCIETY VS. CIT (2015) 372 19 ITR 699 (SC). IN VIEW OF THE FOREGOING FACTS AND TH E LEGAL POSITION, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ENTITLE D FOR REGISTRATION U/S. 12A. THEREFORE, RESPECTFULLY FOLLOWING THE PRECEDENT OF THE COORDINATE BENCH IN THE CASE OF SHREE BALAJI EDUCATIONAL TRUST VS. CIT (SUPRA), WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT AND ACCORDINGL Y, DIRECT THE LD. CIT TO GRANT REGISTRATION UNDER SECTION 12A OF THE ACT TO THE APPLICANT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 04/01/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES