Winsome Foundation, Chandigarh V. CIT I, Chandigarh

ITA 397/CHANDI/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6533 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-09-2016
• Assessment Year: misc
• Appeal Filed On: 11-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Charitable institution; Cancellation of registration
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.397/CHD/2013 (UNDER SECTION 12AA(3) WINSOME FOUNDATION, VS. THE C.I.T-I, # 351, SECTOR 9 D, CHANDIGARH. CHANDIGARH. PAN: AAATW0070G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI RAVI SARANGAL, CIT DR DATE OF HEARING : 07.09.2017 DATE OF PRONOUNCEMENT : 04.12.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL FILED BY THE ASSESSEE HAS BEEN PREFERRE D AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX-I, CHANDIGARH U/S 12AA(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT), DATED 18.3.2013 CANCELLING RE GISTRATION GRANTED TO THE ASSESSEE SOCIETY U/S 12A OF THE ACT. 2. BRIEFLY STATED, THE ASSESSEE SOCIETY WAS REGISTE RED VIDE TRUST DEED MADE ON 27-12-94, WITH THE FOLLOWING OBJ ECTS : A) TO PROVIDE MEDICAL RELIEF TO THE PUBLIC. B) TO ADVANCE EDUCATION OF THE PUBLIC. C) TO PROVIDE RELIEF TO THE POOR. D) TO GRANT SCHOLARSHIPS TO THE NEEDY AND TALENTED STUDENTS TO ENABLE THEM TO PURSUE THEIR EDUCATION. 2 E) TO PROVIDE FOR ANY OTHER OBJECT OF GENERAL PUBLI C UTILITY NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT. F) TO PROMOTE CULTURAL SPORTS, RELIGIOUS AND CHARITABLE ACTIVITIES. 3. IT HAD BEEN GRANTED REGISTRATION U/S 12A OF THE ACT VIDE ORDER DATED 03.05.1995. THE LD. COMMISSIONER OF INCOME TAX, INVOKING HIS POWERS U/S 12AA(3) OF THE ACT, CANCELLED THE REGISTRATION GRANTED U/S 12A HOLDING THE ACTIVITIES OF THE ASSESSEE SOCIETY AS NOT BEING GEN UINE AND NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE TRUST FOR THE FOLLOWING REASONS: I) IT WAS INVOLVED PRIMARILY IN THE BUSINESS ACTIVI TY OF TRADING IN MUTUAL FUNDS AND ITS MAIN OBJECT, THEREFORE, WAS NOT CARRYING OUT ANY CHARITABLE ACTI VITY. II) IT HAD SPENT ONLY A MEAGRE PORTION OF ITS TOTAL RECEIPTS FOR CHARITABLE PURPOSE IN FINANCIAL YEARS 2007- 08 TO F.Y 2009-10. III) THAT THE ONLY APPLICATION OF ITS INCOME WAS GI VING DONATIONS TO OTHER PURPORTED CHARITABLE INSTITUTION S WHICH AS PER THE LD. COMMISSIONER OF INCOME TAX COULD NOT BE TREATED AS APPLICATION OF ITS INCOME I N TERMS OF SECTION 11(1)(A) OF THE ACT. IV) THE PURPOSE FOR WHICH SALARY WAS PAID BY THE ASSESSEE SOCIETY DID NOT APPEAR TO BE GENUINE. 4. THE BASIS FOR ARRIVING AT THE ABOVE CONCLUSIONS BY THE LD. COMMISSIONER OF INCOME TAX WAS THE FINANCIAL DA TA EXTRACTED FROM THE AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE PERTAINING TO ASSESSMENT YEARS 2008-09, 20 09-10 AND 2010-11 WHICH REFLECTED THE FOLLOWING FACTS AND FIGURES: 3 ASSESSMENT YEAR 2008-09/FINANCIAL YEAR 2007-08: S.NO. PARTICULARS AMOUNT S.NO. PARTICULAR AMOUNT I UTILIZATION BY WAY OF GIVING DONATION 3,15,095 I TOTAL RECEIPTS FROM DIVIDEND,INTEREST &RENT 11,72,392 II SHORT TERM CAPITAL LOSS 10,67,936 III OTHER MISC. EXPENSES 82,195 IV EXCESS OF EXP. OVER INCOME 2,92,834 ASSESSMENT YEAR 2009-10/FINANCIAL YEAR 2008-09: S.NO. PARTICULARS AMOUNT S.NO. PARTICULAR AMOUNT I UTILIZATION BY WAY OF GIVING DONATION 3,92,705 I TOTAL RECEIPTS FROM DIVIDEND INTEREST 3,26,396 II SHORT TERM CAPITAL LOSS 12,72,424 III LONG TERM CAPITAL LOSS 17,78,135 ASSESSMENT YEAR 2010-11/FINANCIAL YEAR 2009-10: S.NO. PARTICULARS AMOUNT S.NO. PARTICULAR AMOUNT I UTILIZATION BY WAY OF GIVING DONATION 3,16,023 I TOTAL RECEIPTS FROM DIVIDEND INTEREST 19,57,904 4 II SHORT TERM CAPITAL LOSS 3,06,372 III LONG TERM CAPITAL LOSS 2,00,158 IV OTHER MISC. EXPENSES 82,240 V EXCESS OF INCOME OVER EXPENDITURE 10,53,111 5. DURING THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL FOR ASSESSEE CHALLENGED THE CANCELLATION OF REGISTRATION RAISING THE FOLLOWING CONTENTIONS: A) THAT THE INVESTMENT AND TRADING IN FUNDS WAS PART OF ITS STATED ACTIVITIES MENTIONED IN THE TRUS T DEED AND CONSIDERING WHICH IT HAD BEEN GRANTED REGISTRAT ION U/S 12A VIDE ORDER DATED 3.5.1995. OUR ATTENTION W AS DRAWN TO CLAUSE-6 OF THE TRUST DEED IN SUPPORT OF T HE ABOVE CONTENTION WHICH IS REPRODUCED HEREUNDER: 6. THE TRUSTEE SHALL INVEST THE MONEY HEREBY ENTRUSTED TO THEM OR ANY ACCRETIONS THERETO IN SUCH SECURITIES, SHARES, BUSINESS THEY MAY DEEM FIT AND THE TRUSTEES SHALL BE AT LIBERTY TO BUY SHARES OR INVEST THE AMOUNT IN SUCH MANNER OR CHANGE FROM ONE TO ANOTHER AS THEY MAY DEEM FIT AND IN ACCORDANCE WITH THE PROVISIONS OF THE LAW FOR THE OBJECTS OF THE TRUST. B) THAT GIVING DONATION TO OTHER CHARITABLE INSTITUTIONS WAS TO BE CONSIDERED APPLICATION OF IN COME AS PER SECTION 11(1)(A) OF THE ACT AND CBDT INSTRUC TION NO.1132 DT.05-01-78. THE LD. COUNSEL FOR ASSESSEE 5 DREW OUR ATTENTION TO THE INSTITUTIONS TO WHICH DONATION WAS GIVEN AS REPRODUCED IN THE ORDER OF TH E LD. COMMISSIONER OF INCOME TAX AT PAGES 3 TO 5 AS UNDER: F. Y. 2007-08 SR. NO. NAME OF THE INSTITUTION AMOUNT 1 INNER WHEEL CLUB FOR SUPPORT OF ONE CHILD 15000 2 ISKCON CHANDIGARH FOR RELIGIOUS ACTIVITIES 7100 3 LIONS CLUB CHANDIGARH FOR FIVE EYE OPERATIONS 2500 12500 MAHARSHI PATANJALI VIGYA MANDIR SAMITI, ALLAHABAD, FOR SPONSORSHIP FEE FOR TWO 12360 _______ OXFAM TRUST INDIA FOR POOR CHILDREN EDUCATION 6800 6 PANNALAL & DARSHANLAL AT GUPTKASHI 36335 7 PHD RURAL DEVELOPMENT BOARD/FOUNDATION 100000 8 RAJASTHAN PARISHAD TOWARDS ADVE RTISEMENT AND 25000 9 SOCIETY OF REHABILITATION OF MENTALLY 100000 10. PANNALAL AND DARSHANLAL AT GUPT KASHI 36335 TOTAL 315095 F. Y. 2008-09 SR. NO. NAME OF THE INSTITUTION AMOUNT 1 ASF INDIA 100000 2 CHINMAYA TAPOVAN FOR ONE STUDENT ADMISSION IN GOVT, POLYTECHNIC COLLEGE 10145 3 HYDERABAD CHILDREN AID SOCIETY 1000 4 INNER WHEEL CLUB FOR SUPPORT OF ONE CHILD 15000 5 LALIT KALA AKADEMI FOR SCHOLARSHIP TO ONE BUDDING ARTIST FOR ONE YEAR 25000 6 LIONS CLUB CHANDIGARH TOWARDS ACTIVITY FUND 6800 7 LIONS CLUB CHANDIGARH TOWARDS BOOKLET PRINTING TITLE SAVE ENVIRONMENT & WATER 8320 8 LIONS CLUB CHANDIGARH TOWARDS FREE EYE 100000 9 MAHARSHI PATANJALI VIGYA MANDIR SAMITI ALLAHABAD FOR SPONSORSHIP FEE OF TWO STUDENTS 13440 10 N ADVENTURES FOR SUPPORTING YOUNG ARTISTS 25000 11 PRAGATI SOCIETY FOR STUDENT DEVELOPMENT 25000 12 ROTARY CLUB CHANDIGARH FOR SHED & TOILETS WITH BASIC FACILITIES CONSTRUCTION AT GMCH - 32 50000 13 SOCIETY OF REHABILITATION OF MENTALLY CHALLENGED FOR SUPPORT OF ONE CHILDREN 13000 TOTAL 392705 2009-10 SR. NO. NAME OF THE AMOUNT 1 MAHARSHI PATANJALI VIGYA MANDIR SAMITI ALLAHABAD FOR SPONSORSHIP FEE OF T WO STUDENTS 15600 2 INNER WHEEL CLUB OF CHANDIGARH DISTT 308 TOWARDS SPONSORSHIP OF ONE CHILD IN 'UNCHAAR SCHOOL' 15000 6 3 LIONS CLUB CHANDIGARH CENTRAL TOWARDS 3 FREE EYE OPERATION CAMP 41873 4 SOCIETY OF REHABILITATION OF MENTALLY CHALLENGED FOR CHILDREN EDUCATION TRAINING ETC. 15400 5 RAJASTHAN PARISHAD TOWARDS VARIOUS CULTURAL AND WELFARE ACTIVITIES OF THE 89000 6 LALIT KALA AKADEMI FOR SCHOLARSHIP FOR BUDDING ARTISTS 50000 7 BHARAT PARKASH FOUNDATION 10000 8 LIONS CLUB CHANDIGARH CENTRAL TOWARDS DONATION OF 50 BLANKETS FOR THE PROJECT 5000 9 VOLUNTARY ORGANIZATION HAMARI KAKSLIA 5000 10 LION CLUB FOR SPONSORING TREE PLANTATION AT CHANDIGARH 44150 11 57 FIELD REGIMENT FOR CELEBRATION ITS HONOR TITLE DAY 25000 TOTAL 3,16,023 C ) IT WAS STATED THAT SALARY WAS PAID TO MS. NEERU SURI WHO WAS WORKING IN THE ASSESSEE SOCIETY AS ACCOUNTANT AND MANAGING ALL ACCOUNT WORK AND CORRESPONDENCE AND WAS QUALIFIED AS A BACHELOR OF A RTS AND MASTER OF ARTS IN POLITICAL SCIENCE. COPY OF T HE RECEIPTS ISSUED ON ACCOUNT OF SALARY PAID WAS FILED BY AT PAPER BOOK PAGE NOS.32 TO 55. IT WAS STATED THA T THE SALARY PAID WAS GENUINE. THE LD. COUNSEL FOR ASSESSEE ON THE BASIS OF ABOVE , STATED THAT THERE WAS NO DISCREPANCY AS SUCH TO HOL D THE ACTIVITIES OF THE ASSESSEE SOCIETY AS NOT BEING GENUINE OR NOT IN CONSONANCE WITH ITS STATED OBJECT S AND THUS THE CANCELLATION OF REGISTRATION U/S 12AA( 3) OF THE ACT WAS UNJUSTIFIED AND UNWARRANTED. 6. THE LD. DR, ON THE OTHER HAND, REFERRING TO THE FINANCIAL DATA, AS REFLECTED IN ITS AUDITED FINANC IAL 7 STATEMENTS AND REPRODUCED IN THE EARLIER PART OF OU R ORDER, POINTED OUT THAT THE ONLY UTILIZATION OF INCOME BY THE ASSESSEE SOCIETY IN THREE FINANCIAL YEARS I.E. FROM FINANCIAL YEAR 2007-08 TO FINANCIAL YEAR 2009-10 WAS GIVING DONATIONS TO OTHER INSTITUTIONS. THE LD. DR POINTED OUT THAT THE ASSESSEE HAD NOT EVEN DEMONSTRATED WHETHER DONA TIONS GIVEN TO THESE INSTITUTIONS HAD BEEN FOUND TO HAVE BEEN UTILIZED FOR THE PURPOSE FOR WHICH IT HAD BEEN GIVE N, NOR HAD IT BEEN DEMONSTRATED THAT THE INSTITUTIONS TO W HOM DONATIONS HAD BEEN GIVEN WERE CHARITABLE INSTITUTIO NS REGISTERED U/S 12A OF THE ACT. THE LD. DR STATED T HAT FOR THE AFORESAID REASONS, DONATION GIVEN BY THE ASSESS EE SOCIETY COULD NOT BE TREATED AS APPLICATION OF INCO ME. THE LD. DR FURTHER REFERRING TO THE FINANCIAL DATA STAT ED THAT MAJOR PORTION OF ITS INCOME WAS SUBSUMED IN SHORT T ERM AND LONG TERM LOSSES INCURRED BY THE ASSESSEE ON AC COUNT OF TRADING IN MUTUAL FUNDS AND OTHER SECURITIES WHICH WAS A CLEAR POINTER TO THE FACT THAT THE ASSESSEE SOCIETY WAS PRIMARILY INVOLVED IN ITS BUSINESS ACTIVITY OF INVE STING MUTUAL FUNDS AND SECURITIES AND ITS MAIN OBJECT DEF INITELY WAS NOT A CHARITABLE IN NATURE. THE LD. DR FOR THE AFORESAID REASONS SUPPORTED THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX CANCELLING THE REGISTRA TION GRANTED TO THE ASSESSEE SOCIETY. 7. DURING THE COURSE OF HEARING BEFORE US WHILE OUR ATTENTION WAS DRAWN TO THE CONTENTS OF THE TRUST DE ED EXECUTED FOR FORMING THE ASSESSEE SOCIETY, IT WAS N OTICED 8 FROM PAGE 3 THEREOF PLACED AT PAPER BOOK PAGE 3 BEF ORE US THAT CERTAIN AMENDMENTS HAD BEEN MADE TO THE TRUST DEED W.E.F. 9.1.2000, INCLUDING TWO MORE OBJECTS TO THE STATED OBJECTS AS UNDER: ** THE FOLLOWING TWO OBJECTS HAVE BEEN ADDED AT PAGE 3 OF DEED OF TRUST DATED 27.12.94 BY TRUSTEES AS PER RESOLUTION PASSED IN ITS MEETING HELD ON 9.1.2000:- 7(G) TO DONATE FUNDS TO ORGANISATIONS/INSTITUTIONS FOR UTILIZATION IN ACTIVITIES MORE OR LESS SIMILAR TO THAT OF TRUST. 7(H) TO PROVIDE RELIEF TO VICTIMS OF NATURAL CALAMITY/WAR ETC. 8. SINCE THE ASSESSEE HAD BEEN GRANTED REGISTRATION U/S 12A VIDE ORDER DATED 03.05.1995 AND THE AMENDMENT T O THE OBJECTS, INCLUDING THEREIN THE OBJECTS OF GIVING DO NATIONS, WAS MADE ONLY THEREAFTER I.E. W.E.F. 09.01.2000, A QUERY WAS RAISED BY THE BENCH TO THE LD.COUNSEL FOR THE A SSESSEE, WHETHER SUBSEQUENT TO THE AMENDMENT MADE TO THE TRU ST DEED THE ASSESSEE HAD APPLIED FOR FRESH REGISTRATIO N U/S 12A AND HAD BEEN GRANTED THE SAME. TO THIS, THE LD. CO UNSEL FOR ASSESSEE ANSWERED IN NEGATIVE. THE LD. COUNSEL FOR ASSESSEE WAS THEREAFTER ASKED AS TO WHY WHEN ITS OB JECTS OF GIVING DONATIONS WAS NOT CONSIDERED FOR THE PURPOSE OF GRANT OF REGISTRATION U/S 12A AND WHEN CLEARLY THIS WAS THE ONLY ACTIVITY IN WHICH THE ASSESSEE SOCIETY WAS IND ULGING IN THE PAST THREE YEARS, IT SHOULD NOT BE HELD THAT TH E ACTIVITIES OF THE ASSESSEE SOCIETY WERE NOT IN CONS ONANCE AND AS PER ITS STATED OBJECTS AND HENCE NOT GENUINE LY CARRYING OUT CHARITABLE ACTIVITIES. THE LD. COUNSE L FOR ASSESSEE IN RESPONSE TO THE SAME SUBMITTED THAT IN ANY 9 CASE EVEN WITHOUT INCLUSION OF THE ACTIVITY OF GIVI NG DONATIONS IN THE OBJECTS OF THE ASSESSEE SOCIETY, T HE ACT OF GIVING DONATIONS TANTAMOUNTED TO APPLICATION OF FUN DS AS PER SECTION 11(1)(A) OF THE ACT AS ACCEPTED BY THE REVENUE ALSO VIDE THE CBDT CIRCULAR NO.1132 ISSUED ON 05.01 .1978 WHICH STATED SO IN UNAMBIGUOUS TERMS. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVING G ONE THROUGH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX WE FIND NO REASON TO INTERFERE WITH THE SAME. THE FACT THAT THE ASSESSEE SOCIETY HAS BEEN APPLYING ITS INCOME S OLELY BY WAY OF GIVING DONATIONS TO OTHER INSTITUTIONS, AS I S EVIDENT FROM THE AUDITED FINANCIAL FIGURES OF THE PAST THRE E YEARS AS REPRODUCED ABOVE , IS NOT DISPUTED. IT IS ALSO AN A DMITTED FACT THAT THE ACTIVITY OF GIVING DONATIONS WAS INCL UDED AS PART OF ITS STATED OBJECTS IN THE TRUST DEED BY WAY OF AMENDMENT TO THE TRUST DEED MADE ON 09.01.2000 I.E. SUBSEQUENT TO THE GRANT OF REGISTRATION U/S 12A OF THE ACT ON 03-05-95, MEANING THEREBY THAT THE ACTIVITY OF G IVING DONATIONS WAS NOT CONSIDERED WHILE GRANTING REGISTR ATION U/S 12A OF THE ACT. IT IS ALSO AN ADMITTED FACT THA T SUBSEQUENT TO THE AMENDMENT MADE ,NO FRESH REGISTRA TION U/S 12A HAD BEEN SOUGHT BY THE ASSESSEE. CLEARLY, THEREFORE, THE ACT OF THE ASSESSEE SOCIETY IN APPLYING/UTILIZATING ITS INCOME SOLELY BY WAY OF G IVING DONATIONS TO OTHER INSTITUTIONS WAS NOT IN CONSONAN CE WITH ITS APPROVED OBJECTS. MOREOVER, WE FIND NO MERIT I N THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT THE 10 DONATIONS MADE BY IT TANTAMOUNTED TO UTILIZATION/APPLICATION OF ITS INCOME AS PER THE PR OVISIONS OF SECTION 11(1)(A) OF THE ACT. UNDOUBTEDLY, AS PER T HE INSTRUCTION ISSUED BY THE CBDT NO.1132 DATED 5.1.19 78 AND IN VIEW OF VARIOUS DECISIONS OF THE HON'BLE HIGH CO URTS, DONATIONS TO OTHER CHARITABLE TRUSTS IS TO BE TREAT ED AS APPLICATION OF INCOME AS PER THE PROVISIONS OF SECT ION 11(1)(A) OF THE ACT, BUT WE FIND THAT THE ASSESSEE S CASE IS NOT COVERED BY THIS PROPOSITION OF LAW. AS PER CBD T INSTRUCTION AND CASE LAWS, IT IS PERMISSIBLE UNDER LAW FOR CHARITABLE TRUSTS TO DONATE FOR CHARITABLE OR RELIG IOUS PURPOSES AND APPLY ITS INCOME FOR THE SAID PURPOSE BUT THE BENEFIT OF APPLICATION CANNOT BE CLAIMED IF IT IS F OUND THAT THE FUNDS ARE BEING DIVERTED FOR NON-CHARITABLE PUR POSES. THE CBDT INSTRUCTION STATES SO AS UNDER: BOARD'S INSTRUCTION NO. 1132 DATED 5TH JANUARY, 197 8 AMOUNTS PAID AS DONATION TO OTHER CHARITABLE TRUST AVAILABILITY OF EXEMPTION UNDER S. 11 CHARITABLE TRUSTS SECTION 11 A QUESTION HAS BEEN RAISED REGARDING THE AVAILABILI TY OF EXEMPTION IN THE HANDS OF CHARITABLE TRUSTS OF AMOUNTS PAID AS DONATION TO OT HER CHARITABLE TRUSTS. THE ISSUE HAS BEEN CONSIDERED BY THE BOARD AND IT H AS BEEN DECIDED THAT AS THE LAW STANDS AT PRESENT, THE PAYMENT OF A SUM BY ONE CHAR ITABLE TRUST TO ANOTHER FOR UTILISATION BY THE DONEE TRUST TOWARDS ITS CHARITAB LE OBJECTS IS PROPER APPLICATION OF INCOME FOR CHARITABLE PURPOSE IN THE HANDS OF THE D ONEE TRUST; AND THE DONOR TRUST WILL NOT LOSE EXEMPTION UNDER S. 11 OF THE IT ACT, 1961, MERELY BECAUSE THE DONEE TRUST DID NOT SPENT THE DONATION DURING THE YEAR OF RECEIPT ITSELF. THE ABOVE POSITION MAY KINDLY BE BROUGHT TO THE NOT ICE OF ALL OFFICERS WORKING IN YOUR CHARGE. 11 THE HONBLE GUJARAT HIGH COURT HAS HELD SO IN THE C ASE OF CIT VS SARLA DEVI SARABHAI TRUST NO.2 (1988) 172 IT R 698 AND HAS BEEN REITERATED BY THE HONBLE ALLAHBAD HIG H COURT IN THE CASE OF CIT VS J K CHARITABLE TRUST (1992) 1 96 ITR 31. THE UNDERLYING RATIO EMERGING IS THAT UTILIZATION O F INCOME BY OTHERS IS ALSO TO BE TREATED AS APPLICATION PROV IDED IT IS UTILIZED FOR CHARITABLE PURPOSES ONLY ,WHICH IS ENS URED IF GIVEN TO ANOTHER CHARITABLE TRUST OR IN CASE GIVEN TO OTHERS ,THE UTILIZATION FOR CHARITABLE PURPOSES BY THE DON EE SHOULD BE ENSURED BY THE ASSESSEE. 10. THE FACTS IN THE PRESENT CASE HOWEVER WE FIND D O NOT MEET UP TO THE ABOVE REQUIREMENT. THE ASSESSEE ADM ITTEDLY HAS GIVEN DONATIONS TO VARIOUS ORGANIZATIONS AS REP RODUCED IN EARLIER PART OF OUT ORDER. WHEN ASKED TO SHOW D URING PROCEEDINGS BEFORE THE LD. COMMISSIONER OF INCOME T AX AS TO HOW THEY WERE ACTUALLY UTILIZED BY THE DONEE SOCIETIES/INSTITUTIONS, NOTHING WAS SHOWN BY THE AS SESSEE. THE ASSESSEE HAS, THEREFORE, NEITHER ESTABLISHED TH E USER OF THE DONATIONS FOR CHARITABLE PURPOSES, NOR DEMONSTR ATED THAT THE SAID DONEE SOCIETY WAS A CHARITABLE SOCIET Y REGISTERED U/S 12A OF THE ACT. MEANING THEREBY THAT THE ASSESSEE SOCIETY HAS NOT DEMONSTRATED THE APPLICATI ON` OF ITS FUNDS FOR CHARITABLE PURPOSES. THE ASSESSEE, T HEREFORE, IS NOT ENTITLED TO CLAIM THE DONATIONS AS APPLICATI ON OF ITS INCOME. 12 IN VIEW OF THE ABOVE, WE AGREE WITH THE LD. COMMIS SIONER OF INCOME TAX THAT THE ASSESSEE IS INDULGING IN THE ACTIVITY OF GIVING DONATIONS TO OTHER INSTITUTIONS WHICH IS NOT IN CONSONANCE WITH THE APPROVED OBJECTS OF THE ASSESSE E SOCIETY. WE, THEREFORE, UPHOLD THE ACTION OF THE LD . COMMISSIONER OF INCOME TAX IN CANCELLING THE REGIST RATION GRANTED U/S 12A OF THE ACT BY INVOKING THE PROVISIO NS OF SECTION 12AA(3) OF THE ACT. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 4 TH DECEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)S 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH