Labana Sikh Educational Society, Ambala V. CIT (Exemptions), Chandigarh

ITA 287/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8376 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 27-07-2016
• Assessment Year: misc
• Appeal Filed On: 31-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGALCIT
• Keywords: Charitable institution; Wrong claim
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.287/CHD/2016 (UNDER SECTION 12AA OF THE ACT) LABANA SIKH EDUCATIONAL SOCIETY, VS. THE CIT (EXEMPTIONS), BARARA, AMBALA. CHANDIGARH. PAN: AABTL2722M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI RAVI SARANGAL,CIT DR DATE OF HEARING : 25.10.2016 DATE OF PRONOUNCEMENT : 18.01.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED IS DIRECTED AGAINST THE ORDER O F LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH DATED 29.01.2016,REJECTING THE APPELLANT SOCIETIES APPLICATION FOR GRANT OF REGISTRATION UND ER SECTION 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE APPELLANT HAS RAISED THE FOLLOWING GROUNDS : 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (EXEMPTION S), CHANDIGARH HAS ERRED IN NOT GRANTING REGISTRATION U /S 12AA OF THE I.T. ACT TO THE SOCIETY. 2 2. THAT THE REFUSAL TO GRANT REGISTRATION IS NOT PRO PER SINCE THE APPLICANT SOCIETY HAD BEEN CARRYING ON EDUCATIO NAL ACTIVITY SINCE LONG AND, THEREFORE, THE FINDING OF THE CIT (EXEMPTIONS) THAT THE GENUINENESS OF ACTIVITIES DO NOT CORROBORATE VIZ. EDUCATIONAL ACTIVITY, IS AGAINST T HE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE SOCIETY HAD BEEN IN EXISTENCE SINCE 198 1 AND HAD BEEN IMPARTING QUALITY EDUCATION TO THE GENERAL PUBLIC AT LARGE AND THE FINDING OF THE CIT THAT IT IS BEING RUN ON COMMERCIAL LINES AND DO NOT STAND TO JUSTIFY THE CLAIM FOR REGISTRATION U/S 12AA UNDER I.T. ACT, IS AG AINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THAT THE WORTHY CIT HAS FAILED TO APPRECIATE THE F ACT THAT UNDER SIMILAR FACTS AND CIRCUMSTANCES, THERE IS BINDING JUDGMENT OF THE HON'BLE SUPREME COURT IN TH E CASE OF 'PINE GROVE EDUCATIONAL SOCIETY' AND OF THE 'QUEEN EDUCATIONAL SOCIETY', UTTRAKH AND, WHEREIN O N SIMILAR ISSUE, THE REGISTRATION U/S 12AA HAD BEEN G RANTED AND, AS SUCH, THE DENIAL OF REGISTRATION U/S 12AA W AS NOT PROPER. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND T HE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D OR DISPOSED OFF. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE APPELLANT SOCIETY WAS REGISTERED SINCE 1981 WITH TH E STATED OBJECTS OF RUNNING OF SANT MOHAN SINGH KHALS A LABANA GIRLS COLLEGE, BARARA AND ANY OTHER EDUCATIO N INSTITUTION WITH THE VIEW OF PROVIDING ALL AROUND B ALANCED AND WHOLESOME EDUCATION TO THE YOUTH. THE APPELLAN T SOCIETY FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT IN FORM NO.10A ON 14.7.2015. ACCORD INGLY, 3 NOTICE OF HEARING WAS ISSUED TO THE APPELLANT DURIN G THE COURSE OF WHICH DETAILS WERE FILED. THE LEARNED COMMISSIONER OF INCOME TAX AFTER PERUSING THE DETA ILS FILED, FOUND THAT THE BY-LAWS OF THE APPELLANT SO CIETY, WHICH WAS FORMED IN 1981, HAD REMAINED UNCHANGED BU T AN ADDITIONAL SCHOOL UNDER THE NAME OF S.M.S. PUBLI C SCHOOL HAD STARTED RUNNING UNDER THE AEGIS OF THE S OCIETY. THE LEARNED COMMISSIONER OF INCOME TAX FURTHER NOT ED THAT WHILE THE APPELLANT SOCIETY HAD BEEN SHOWING INCOME FROM DONATION AND RENT ONLY, THE TWO SCHOOLS HAD BE EN SHOWING INCOME FROM FEES, RENT ETC. HE FURTHER NOT ED THAT THE COLLEGE WAS SUBSTANTIALLY FINANCED BY THE GOVER NMENT, AS 95% OF SALARY WAS REIMBURSED BY THE HARYANA GOVERNMENT AND BALANCE 5% PAID BY THE MANAGEMENT. TAKING INTO CONSIDERATION THIS FACT, THE LEARNED COMMISSIONER OF INCOME TAX HELD THAT THE APPELLANT SOCIETY WAS LIABLE TO FILE RETURN UNDER SECTION 10(23C)(IIIAB) OF THE ACT, BUT HAD NOT DONE SO. HE FURTHER NOTED THE RECEIPTS OF THE APPELLANT SOCIETY AND TH E SCHOOL AND COLLEGE RUN BY IT FOR THREE FINANCIAL YEARS I.E . FINANCIAL YEARS 2012-13, 2013-14, 2014-15 AND FOUND THAT THE AGGREGATE RECEIPTS OF THREE INSTITUTIONS I N ALL THE YEARS EXCEEDED RS.1 CRORE. HE, THEREFORE, HELD THA T THE APPELLANT SOCIETY HAD WRONGLY CLAIMED EXEMPTION UND ER SECTION 10(23C)(IIIAD) OF THE ACT. CONSIDERING THE AFORESTATED ASPECTS OF THE CASE, THAT WRONG CLAIMS WERE MADE BY THE APPELLANT SOCIETY, THE LEARNED COMMISSI ONER OF INCOME TAX HELD THAT GENUINENESS OF THE ACTIVITI ES DID 4 NOT STAND CORROBORATED. HE FURTHER STATED THAT DIF FERENT FORMS OF INSTITUTIONS OF THE APPELLANT SOCIETY WERE BEING RUN ON COMMERCIAL BASIS WHICH DO NOT SATISFY ITS CL AIM FOR REGISTRATION UNDER SECTION 12AA OF THE ACT AND THER EBY REJECTED THE APPELLANT SOCIETYS APPLICATION FOR RE GISTRATION UNDER SECTION 12AA OF THE ACT. 4. AGGRIEVED BY THE SAME, THE APPELLANT SOCIETY FILED THE PRESENT APPEAL BEFORE US. DURING THE COU RSE OF HEARING BEFORE US, THE LD. COUNSEL FOR THE APPELLAN T ARGUED THAT THE LEARNED COMMISSIONER OF INCOME TAX HAD ERRED IN DENYING REGISTRATION SINCE NOTHING ADVERSE HAD BEEN FOUND BY THE LEARNED COMMISSIONER OF INCOME TA X REGARDING GENUINENESS OF THE OBJECTS AND THE ACTIVI TIES OF THE APPELLANT SOCIETY. THE LD. COUNSEL FOR THE APP ELLANT STATED THAT FOR THE PURPOSE OF GRANT OF REGISTRATIO N THE COMMISSIONER HAS ONLY TO CONSIDER THE GENUINENESS O F THE OBJECTS AND ACTIVITIES OF THE TRUST AS PER PROVISIO NS OF SECTION 12AA OF THE ACT AND THE SAME HAVING NOT BEE N DOUBTED BY THE LEARNED COMMISSIONER OF INCOME TAX , THE REGISTRATION HAD BEEN WRONGLY DENIED TO THE APPELLA NT. THE LD. COUNSEL FOR THE APPELLANT ALSO STATED THAT ALL BOOKS OF ACCOUNTS, PERTAINING TO THE SOCIETY, SCHOO L AND COLLEGE FOR THREE FINANCIAL YEARS I.E. FINANCIAL YE ARS 2012- 13 TO 2014-15 HAD BEEN FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), ALONGWITH COPY OF REGISTRATION OF THE SOCIETY, THE CONSTITUTI ON/BY- LAWS, LETTER OF REGISTRATION AND FORM NO.10A AND NO DEFECT 5 HAS BEEN FOUND IN THE SAME. THE LD. COUNSEL FOR TH E APPELLANT SOCIETY FURTHER STATED THAT THE SOCIETY H AD BEEN AVAILING EXEMPTION UNDER SECTION 10(23C) DURING PAS T MANY YEARS AND THE SAME HAD NEVER BEEN QUESTIONED IN ANY OF THE PREVIOUS YEARS. THE LD. COUNSEL FOR THE APPELLANT STATED THAT DEFECT POINTED OUT BY THE LEA RNED COMMISSIONER OF INCOME TAX, THAT IT SHOULD HAVE C LAIMED EXEMPTION UNDER SECTION 10(23C)(IIIAB) INSTEAD OF S ECTION 10(23C)(IIIAD), WAS NOT A MATTER REQUIRING CONSIDER ATION BY THE COMMISSIONER FOR THE PURPOSE OF GRANT OF REGIST RATION. FURTHER THE LD. COUNSEL FOR THE APPELLANT STATED TH AT EVEN ON MERITS OF THE ISSUE REGARDING CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT TO BE TAKEN ON AG GREGATE BASIS, THERE WERE A NUMBER OF DECISIONS OF THE HIG H COURTS AND TRIBUNALS WHICH STATED THAT LIMIT OF RS. 1 CRORE HAD TO BE TAKEN INSTITUTION-WISE AND NOT ON AGGREGA TE BASIS. THE LD. COUNSEL FOR THE APPELLANT, THEREFOR E, STATED THAT IN ANY CASE THE DENIAL OF REGISTRATION TO THE APPLICANT SOCIETY WAS WRONG AND THE SAME NEEDED TO BE RESTORE D. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX . 6. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELO W AND GONE THROUGH THE DOCUMENTS PLACED BEFORE US. WE HO LD THAT THE LEARNED COMMISSIONER OF INCOME TAX IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE HAS ERR ED IN DENYING REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE 6 APPELLANT SOCIETY. THE REGISTRATION TO BE GRANTED BEING GOVERNED BY THE PROVISIONS OF SECTION 12AA OF THE A CT, IT IS SETTLED LAW THAT THE SCOPE OF POWERS OF THE COMMISS IONER IS LIMITED TO BEING SATISFIED ABOUT THE GENUINENESS OF THE OBJECTS AND THE GENUINENESS OF THE ACTIVITIES OF TH E APPLICANT SOCIETY/TRUST. THE PURPOSE BEING THAT S INCE BY VIRTUE OF THE REGISTRATION OBTAINED UNDER SECTION 1 2AA OF THE ACT, THE ASSESSEES ARE ELIGIBLE TO CLAIM EXEMPT ION UNDER THE PROVISIONS OF SECTIONS 11 AND 12 OF THE A CT ON ACCOUNT OF CARRYING OUT CHARITABLE ACTIVITIES, THE REGISTRATION BY THE COMMISSIONER ACTS AS A CERTIFIC ATION THAT THE ASSESSEE TRUSTS/INSTITUTIONS HAVE BEEN FOR MED FOR CHARITABLE PURPOSES AS DEFINED UNDER SECTION 2(15) OF THE ACT AND ARE GENUINELY CARRYING ON THE ACTIVITIES FO R WHICH THEY HAVE BEEN FORMED. BASED ON THIS CERTIFICATION/REGISTRATION THE ASSESSEES ARE ENTITL ED TO CLAIM EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT . THUS IT IS ONLY THE GENUINENESS OF THE OBJECTS AND ACTIVITIES WHICH HAVE TO BE EXAMINED BY THE COMMISS IONER WHILE GRANTING REGISTRATION U/S 12A OF THE ACT. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS RED ROSE SCHOOL (2007)163 TAXMAN 19 HAD ELABORATELY DEALT WITH THE SCOPE OF POWERS OF THE COMMISSIONER UNDER SECTION 12AA OF THE ACT AND SPELT OUT THE SAME AS FOLLOWS : 17. ON A READING OF PROVISIONS OF SUB-CLS. (A) AND (B) OF S. 12AA, IT MAKES CLEAR THAT THE CIT HAS TO SATISFY HIMSELF ABO UT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND A LSO ABOUT THE OBJECTS OF THE TRUST OR THE INSTITUTION. 7 18. ON BEING SATISFIED ABOUT THE GENUINENESS OF THE ACT IVITIES OF THE TRUST OR THE INSTITUTION AND ALSO ABOUT ITS OBJECTS , THE CIT WOULD EITHER GRANT THE CERTIFICATE OR WOULD REJECT THE PRAYER. I N ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION, HE CAN CALL FOR SUCH DOCUMENTS OR INFO RMATION FROM THE TRUST OR THE INSTITUTION, AS HE THINKS NECESSARY AN D HE IS ALSO EMPOWERED TO MAKE SUCH ENQUIRIES AS HE MAY DEEM NEC ESSARY IN THIS BEHALF. 19. THE OBJECTS OF THE TRUST CAN BE HAD FROM THE BYE-LA WS OR THE DEED OF TRUST, AS THE CASE MAY BE AND UNLESS, OF COURSE, THE OBJECTS OF THE TRUST APPARENTLY MAKE OUT THAT THEY WERE NOT IN CON SONANCE WITH THE PUBLIC POLICY OR THAT THEY WERE NOT THE OBJECTS OF ANY CHARITABLE PURPOSE, REGISTRATION CANNOT BE REFUSED ACCORDINGLY ON THIS GROUND. 20. IN REGARD TO THE GENUINENESS OF THE ACTIVITIES OF T HE TRUST OR THE INSTITUTION, WHOSE OBJECTS DO NOT RUN CONTRARY TO P UBLIC POLICY AND ARE, IN FACT, RELATED TO CHARITABLE PURPOSES, THE CIT IS AGAIN EMPOWERED TO MAKE ENQUIRIES AS HE THINKS FIT. IN CASE THE ACTIVI TIES ARE NOT GENUINE AND THEY ARE NOT BEING CARRIED OUT IN ACCORDANCE WI TH THE OBJECTS OF THE TRUST/SOCIETY OR THE INSTITUTION, OF COURSE, TH E REGISTRATION CAN AGAIN BE REFUSED. BUT ON MERE PRESUMPTIONS AND ON S URMISES THAT INCOME DERIVED BY THE TRUST OR THE INSTITUTION IS B EING MISUSED OR THAT THERE IS SOME APPREHENSION THAT THE SAME WOULD NOT BE USED IN THE PROPER MANNER AND FOR THE PURPOSES RELATING TO ANY CHARITABLE PURPOSE, REJECTION CANNOT BE MADE. 21. SEC. 12AA, WHICH LAYS DOWN THE PROCEDURE FOR REGIST RATION, DOES NOT SPEAK ANYWHERE THAT THE CIT, WHILE CONSIDERING THE APPLICATION FOR REGISTRATION, SHALL ALSO SEE THAT THE INCOME DERIVE D BY THE TRUST OR THE INSTITUTION IS EITHER NOT BEING SPENT FOR CHARITABL E PURPOSE OR SUCH INSTITUTION IS EARNING PROFIT. THE LANGUAGE USED IN THE SECTION ONLY REQUIRES THAT ACTIVITIES OF THE TRUST OR THE INSTIT UTION MUST BE GENUINE, WHICH ACCORDINGLY WOULD MEAN, THEY ARE IN CONSONANC E WITH THE OBJECTS OF THE TRUST/ INSTITUTION, AND ARE NOT MERE CAMOUFLAGE BUT ARE REAL, PURE AND SINCERE, NOR AGAINST THE PROPOSED OB JECTS. THE PROFIT EARNING OR MISUSE OF THE INCOME DERIVED BY CHARITAB LE INSTITUTION FROM ITS CHARITABLE ACTIVITIES, MAY BE A GROUND FOR REFU SING EXEMPTION ONLY WITH RESPECT TO THAT PART OF THE INCOME BUT CANNOT BE TAKEN TO BE A SYNONYM TO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION. . . . . 28. IT IS SIGNIFICANT TO MENTION THAT REGISTRATION UNDE R S. 12AA, DOES NOT NECESSARILY ENTITLE THE ASSESSEE TO GET THE INC OME EXCLUDED FROM THE INCOME OF THE PREVIOUS YEAR FOR THE PURPOSE OF DETERMINATION OF TAX LIABILITY BUT IT ONLY ENTITLES THE ASSESSEE TO CLAIM SUCH EXEMPTION, WHICH OTHERWISE COULD NOT BE CLAIMED IN THE ABSENCE OF REGISTRATION. THE ENQUIRY BY THE CIT SHALL REMAIN RESTRICTED TO T HE EXAMINATION, AS TO WHETHER THE ASSESSEE, WHO HAS MOVED THE APPLICAT ION FOR 8 REGISTRATION UNDER S. 12A, IS ACTUALLY IN THE ACTIV ITIES WHICH ARE GENUINE. GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION HAS TO BE SEEN, KEEPING IN MIND THE OBJECTS THEREOF , WHICH NECESSARILY MEANS THAT THE CIT SHALL SATISFY HIMSELF ABOUT THE FACT THAT THE ACTIVITIES ARE GENUINE AND IN CONSONANCE WITH THE O BJECTS OF THE TRUST OR THE INSTITUTION. IN OTHER WORDS, IF ESTABLISHING AND RUNNING A SCHOOL IS THE OBJECT OF THE SOCIETY, AS GIVEN IN ITS BYE-L AWS, IT HAS TO BE SATISFIED THAT THE SOCIETY HAS ESTABLISHED THE SCHOOL , WHERE EDUCATION IS BEING IMPARTED AS PER RULES AND THE FACTUM OF ES TABLISHMENT AND RUNNING SCHOOL IS A GENUINE ACTIVITY. THE ENQUIRY REGARDING GENUINENESS OF THE ACTIVITIES CANNOT BE STRETCHED B EYOND THIS. 7. IN THIS LEGAL BACKDROP, WE FIND THAT THE FACTS IN THE PRESENT CASE DEMONSTRATE THAT NOTHING ADVERSE H AS BEEN FOUND BY THE COMMISSIONER OF INCOME TAX REGARD ING THE GENUINENESS OF THE OBJECTS OF THE APPLICANT SOC IETY. IN FACT, THE OBSERVATIONS OF THE LEARNED COMMISSIONER OF INCOME TAX IN THIS REGARD ARE THAT THE MAIN AIM OF APPLICANT SOCIETY IS RUNNING OF SANT MOHAN SINGH KH ALSA LABANA GIRLS COLLEGE AND OTHER OBJECTS AND ANY OTHE R EDUCATIONAL INSTITUTE WITH A VIEW TO PROVIDING ALL ROUND BALANCED AND WHOLESOME EDUCATION TO THE YOUTH SO AS TO MAKE THEM WORTHY CITIZENS OF THIS GREAT COUNTRY. C LEARLY, THE OBJECTS OF THE APPELLANT SOCIETY RELATE TO IMPA RTING EDUCATION AND ARE CHARITABLE AS DEFINED UNDER SECTI ON 2(15) OF THE ACT. FURTHER WE FIND THAT THERE IS NO ADVERSE OBSERVATION REGARDING THE ACTIVITIES CARRIED ON BY THE APPELLANT SOCIETY BY WAY OF IMPARTING EDUCATION. ADMITTEDLY, ALL BOOKS OF ACCOUNT OF THE SOCIETY, SC HOOL AND COLLEGE FOR THE FINANCIAL YEARS 2012-13 TO 2014-15 WERE 9 FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX , COPY OF REGISTRATION OF THE SOCIETY, THE CONSTITUTION/BY -LAWS, THE LETTER OF REGISTRATION ALL WERE FILED BEFORE TH E LEARNED COMMISSIONER OF INCOME TAX , WHO AFTER PERUSING THE SAME HAS NOT FOUND ANYTHING ADVERSE REGARDING THE ACTIVITIES BEING CARRIED ON BY THE ASSESSEE SOCIETY . THUS, CLEARLY, THE GENUINENESS OF THE ACTIVITIES OF THE APPLICANT SOCIETY HAS NOT BEEN DOUBTED BY THE LEARNED COMMISS IONER OF INCOME TAX .EVEN BEFORE US THE CERTIFICATE OF REGISTRATION OF SOCIETIES WAS FILED SHOWING THAT TH E APPLICANT SOCIETY WAS REGISTERED ON 12 TH NOVEMBER 1981.COPY OF CONSTITUTION OF THE SOCIETY WAS FILED TO PROVE THAT IT WAS FORMED PRIMARILY FOR THE PURPOSE OF IMP ARTING EDUCATION AND THUS HAD A CHARITABLE OBJECT. FURTHE R COPY OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FO R THE YEAR ENDED ON 31-03-2015 WAS FILED SHOWING RECEIPTS OF THE COLLEGE AND SCHOOL RUN BY THE APPLICANT SOCIETY PRIMARILY FROM FEES, THUS PROVING THE GENUINENESS O F THE ACTIVITIES CARRIED OUT BY IT. 8. WHAT THE LEARNED COMMISSIONER OF INCOME TAX HAS FOUND OBJECTIONABLE IS THAT THE APPLICANT SOCIE TY, BEING LIABLE TO CLAIM EXEMPTION UNDER SECTION 10(23C)(IIIAB), SINCE IT IS WHOLLY FINANCED BY THE STATE GOVERNMENT HAS NOT DONE SO. CLEARLY, THIS IS NOT A REFLECTION ON THE GENUINENESS OF THE ACTIVITIES BEI NG CARRIED ON BY THE APPLICANT SOCIETY. IN FACT, IT I S AFFIRMATION OF THE SAME SINCE EVEN AS PER THE AFOR ESTATED 10 OBSERVATION OF THE LEARNED COMMISSIONER OF INCOME T AX, THE APPLICANT SOCIETY IS ELIGIBLE TO CLAIM EXEMPTIO N UNDER SECTION 10(23C)(IIIAB) OF THE ACT WHICH GRANTS EXEM PTION TO INSTITUTIONS EXISTING SOLELY FOR THE PURPOSE OF IMP ARTING EDUCATION. THE OTHER ADVERSE FINDING OF THE LEARNE D COMMISSIONER OF INCOME TAX IS VIS--VIS THE FACT T HAT THE APPLICANT SOCIETY HAS WRONGLY CLAIMED EXEMPTION UND ER SECTION 10(23C)(IIIAD) OF THE ACT SINCE AGGREGATING THE INCOME OF THE SOCIETY, COLLEGE AND SCHOOL RUN BY IT , THE SAME EXCEEDS RS.1 CRORE WHICH IS THE LIMIT SET UND ER THE STATUTE FOR CLAIMING EXEMPTION UNDER SECTION 10(23C)(IIIAB) OF THE ACT. AGAIN WE FIND THAT THI S HAS NO REFLECTION ON THE GENUINENESS OF THE ACTIVITIES CAR RIED OUT BY THE APPLICANT SOCIETY, BUT IS AN AFFIRMATION OF THE GENUINENESS OF THE ACTIVITIES SINCE IT CALLS INTO Q UESTION THE CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT, WHICH GRANTS EXEMPTION FROM TAX OF INCOMES OF INSTITUTIONS EXISTING SOLELY FOR THE PURPOSE OF EDU CATION AND WHOSE RECEIPTS DURING A FINANCIAL YEAR DO NOT E XCEED A SPECIFIED LIMIT, ON ACCOUNT OF THE INCOME EXCEEDING A PARTICULAR LIMIT BUT DOES NOT DOUBT THE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE ASSESSEE. FURTHER THE OBSERVATION OF THE LD.CIT THAT THE INSTITUTIONS OF THE APPLICANT SOCIETY ARE BEING RUN ON COMMERCIAL LINES ,WE FIND HAS NO BASIS. LD.CIT HAS MERELY MADE A GENERAL COMMENT ON THE ABOVE LINES WHICH IS NOT SUPPORTED B Y ANY FACTS OR FIGURES AND HENCE IN OUR VIEW REQUIRES NO CONSIDERATION. 11 9. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE LEAR NED COMMISSIONER OF INCOME TAX HAD FOUND NOTHING ADVER SE RELATING TO THE ACTIVITIES OF THE ASSESSEE APPLICAN T AND, THEREFORE, WE HAVE NO HESITATION IN HOLDING THAT EV EN THE ACTIVITIES OF THE APPLICANT SOCIETY WERE GENUINE. 10. IN VIEW OF THE ABOVE, SINCE THE GENUINENESS OF BOTH THE OBJECT AND ACTIVITIES OF THE ASSESSEE SOCI ETY HAVING NOT BEEN DOUBTED, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE LD.CIT CANNOT BE SUST AINED. CONSEQUENTLY WE SET ASIDE THE ORDER PASSED BY THE C IT AND DIRECT THAT REGISTRATION APPLIED FOR BY THE APP LICANT SOCIETY U/S 12A OF THE ACT BE GRANTED. 11. IN THE RESULT APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH JANUARY, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH