CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN, Jaipur V. CIT-III, Jaipur

ITA 506/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87545 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 11-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLEE AGARWAL
• Keywords: Charitable institution; Earning of tax free income; Source of fund; Cancellation of registration
• Section: 12A; 12AA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 506/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : .......................... CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN NEAR MODI COLLEGE, MAHARAJA SURAJMAL NAGAR, P.O. LAXMANGARH, DISTRICT- SIKAR. CUKE VS. THE COMMISSIONER OF INCOME TAX-III, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAAC 6259 L VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROLEE AGARWAL (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 17/12/2014 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 27/02/2015 VKNS'K @ ORDER PER: T.R. MEENA, A.M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER DT. 30.06.2013 PASSED BY LD. CIT-III, JAIPUR U/S 12AA O F THE IT ACT, 1961. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- (I) THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW IN REJECTING THE APPLICATION OF ASS ESSEE FOR ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 2 GRANT OF REGISTRATION U/S 12AA OF INCOME TAX ACT, 19 61. HE HAS FURTHER ERRED ON FACTS AND IN LAW IN DOUBTING T HE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE BY DO UBTING THE (I) SOURCE OF FUNDS BROUGHT IN THE BOOKS OF ACC OUNTS IN THE FORM OF DEPOSITS (II) APPLICATION OF INCOME OF THE ASSESSEE TOWARDS ITS OBJECTIVES (III) EXPENDITURE ON DIESEL DEBITED IN THE BOOKS OF ACCOUNTS AND (IV) FEES CONC ESSION GIVEN TO SEVERAL STUDENTS. (II) THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW IN REFUSING REGISTRATION U/S 12AA B Y NOT PROVIDING PROPER OPPORTUNITY OF HEARING TO THE ASSE SSEE ON THE ISSUES RAISED BY HIM FOR DOUBTING THE ACTIVITIE S OF THE TRUST. 2. BOTH THE GROUNDS OF APPEAL ARE AGAINST REFUSING TO GRANT REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED AS THE ACT). IN THIS CASE ASSESSEE FILED AN APPLI CATION IN FORM NO.10A ON 12.12.2013 FOR REGISTRATION U/S 12A(1)(AA) OF TH E ACT. THE LD. CIT AFTER MAKING VARIOUS ENQUIRIES MADE CERTAIN OBSERVA TIONS AT PG 2 TO 8 OF HIS ORDER. THE SUMMARY OF THESE OBSERVATIONS ARE AS UNDER:- (I) AT PARA 3, PG 2 TO 6 OF THE ORDER IT WAS OBSERVE D THAT OUT OF 6 DEPOSITORS AS MENTIONED ON PG 2 OF THE ORDER, WHO WERE REQUIRED TO BE PRODUCED, ONLY 2 ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 3 DEPOSITORS NAMELY BANWARI LAL BHASKAR, AND SH. REKH SINGH GARWAL OF GARWAL TUBEWELL CO. FROM WHOM LOAN OF RS.12 LACS AND RS.18 LACS RESPECTIVELY WERE OBTAINED AND PRODUCED FOR EXAMINATION. THE CIT FOUND CERTAIN DISCREPANCIES IN THEIR STATEMENT RECORDED BY HIM AS MENTIONED ON PG 4 & 5 OF THE ORDER. FURTHER IT WAS OBSERVED THAT THERE ARE HUGE DEPOSITS AND THE CONFIRMATIONS SUBMITTED WERE NOT ONLY INCOMPLETE BUT SOME OF THEM WERE INADEQUATE. THERE ARE 200 DEPOSITORS FROM WHOM LOAN AMOUNTING TO RS.19,500/- IS OBTAINED IN CASH. THESE DEPOSITORS WERE REPAID DURING THE YEAR ITSELF BUT ASSESSEE COUL D FILE CONFIRMATIONS IN 53 CASES ONLY. THEREFORE, CONSIDERING THESE CIRCUMSTANCES, THE GENUINENESS OF THE DEPOSITS IS DOUBTFUL. (II) AT PARA 4, PG 6 IT IS OBSERVED THAT THE ASSESS EE SOCIETY HAS GIVEN ADVANCE OF RS.90,000/- TO SH. HANUMAN RAM WITHOUT ANY INTEREST WHICH IS STATED TO BE PROVIDED AGAINST PURCHASE OF FURNITURE BUT NO EVIDENCE OF SUPPLY OF FURNITURE WAS FURNISHED. THUS, THE ASSESSEE COULD NOT ADDUCE THE EVIDENCE TO SHOW THE PURPOSE FOR WHICH AMOUNT WAS ADVANCED TO HANUMAN RAM WHICH CREATES SERIOUS DOUBT OVER THE APPLICATION OF INCOME BY THE SOCIETY TOWARDS ITS OBJECTIVES. ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 4 (III) AT PARA 5, PG 6 TO 8 OF THE ORDER IT IS OBSER VED THAT ASSESSEE SOCIETY IS INCURRING HUGE EXPENDITURE ON PURCHASE OF DIESEL AND VEHICLE RUNNING WHICH DO NOT COMMENSURATE WITH THE BUS FEES CHARGED. THE EXPENSES PRIMA FACIE APPEAR ON A HIGHER SIDE. THE BILLS FOR THE DIESEL EXPENSES HAVE BEEN MADE AS PER CONVENIENCE RATHER ON THE BASIS OF ACTUAL CONSUMPTION. STATEMENT OF SH. KURDARAM BHASKAR, CHAIRMAN OF THE SOCIETY WAS RECORDED IN THIS CONNECTION BUT HE COULD NOT SATISFACTORILY REPLY TO THE VARIOUS ISSUES RAISED. (IV) AT PARA 6, PG 8 OF THE ORDER IT IS OBSERVED TH AT ASSESSEE SOCIETY HAS GIVEN FEES CONCESSION TO THE SEVERAL STUDENTS BUT BASIS FOR SUCH CONCESSION IS N OT EVIDENT. SONS OF THE TWO MEMBERS OF THE SOCIETY ARE ALSO PROVIDED CONCESSION IN FEES. IN THE ABSENCE OF THE PROPER GUIDELINES AND DOCUMENTATION, THERE IS A LACK OF TRANSPARENCY IN THE MANNER SUCH CONCESSIONS ARE GIVEN. 2.1 IN VIEW OF ABOVE OBSERVATIONS THE LD. CIT HELD T HAT HE IS NOT SATISFIED WITH THE GENUINENESS OF THE ACTIVITIES INASMUCH AS THE SOURCE OF THE FUNDS BROUGHT IN THE BOOKS OF ACCOUNT S IN FORM OF DEPOSITS IS DOUBTFUL, THE GENUINENESS OF THE EXPEND ITURE DEBITED IN ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 5 THE BOOKS OF ACCOUNTS IS ALSO DOUBTFUL, THERE IS AN OPAQUENESS IN WHICH THE SOCIETY IS FUNCTIONING AND THAT THE SOCIET Y IS CONTROLLED BY ITS CHAIRMAN. HE THEREFORE, HAS NOT CONSIDERED THE CASE FIT FOR REGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, APPL ICATION FILED BY THE APPLICANT IN FORM NO. 10A DATED 12/12/2013 WAS REJEC TED. 3. BEING AGGRIEVED BY THE ORDER OF THE CIT-III, JA IPUR, THE ASSESSEE IS BEFORE US. 4. THE LD. A/R FOR THE ASSESSEE SUBMITTED AS UNDER :- THE ONLY CONDITION FOR GRANT OF REGISTRATION U/S 12A A IS THAT THE CIT IS TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST/ INSTITUTIONS AND THE GENUINENESS OF ITS ACTIVITIES. THE CIT IS SATISFIED WITH THE OBJECTS OF THE SOCIETY BUT IS NOT SATISFIED WITH THE GENUINENESS OF THE ACTIVITY CARRIED OUT BY IT F OR THE REASONS STATED IN HIS ORDER. IN RESPECT OF THE ACTI VITIES OF THE SOCIETY HE HAS NOT DISPUTED TO THE FACT THAT THE ON LY ACTIVITY OF THE ASSESSEE SOCIETY IS TO IMPART EDUCATION FOR WHIC H IT IS RUNNING A SECONDARY SCHOOL AFFILIATED WITH CBSE, NEW DELHI. THE STUDENTS ARE IMPARTED EDUCATION IN THE SCHOOL RU N BY THE SOCIETY AS IS EVIDENT FROM THE NUMBER OF THE STUDEN TS WHO WERE IMPARTED EDUCATION FOR THE SESSION 2011-12 TO 2 013-14 PLACED AT PB 51-53, THE PHOTOGRAPHS OF THE VARIOUS ACTIVITIES CARRIED OUT BY THE STUDENTS STUDYING IN THE SCHOOL RUN BY THE ASSESSEE SOCIETY PLACED AT PB 63-78 AND THE COPY OF THE INCOME & EXPENDITURE ACCOUNT FOR YEAR ENDING 31.03. 2011, ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 6 31.03.2012 AND 31.03.2013 PLACED AT PB 33-50 FROM WHICH IT IS EVIDENT THAT THE SOCIETY CARRIES OUT THE EDUCATI ONAL ACTIVITIES WITHOUT PROFIT MOTIVE INASMUCH AS THERE IS HARDLY AN Y SURPLUS IN THE SCHOOL RUN BY THE SOCIETY. ALL THESE EVIDENC ES PROVE THAT THE ACTIVITIES OF THE SOCIETY ARE GENUINE. THEREFORE , VARIOUS OBSERVATIONS OF CIT REGARDING THE DEPOSITS RAISED B Y THE SOCIETY OR THE EXPENDITURE INCURRED ON VEHICLE RUNN ING OR THE CONCESSION IN THE FEES GIVEN TO THE STUDENTS OR THE PETTY ADVANCE GIVEN ARE IRRELEVANT ISSUES IN EXAMINING TH E GENUINENESS OF THE ACTIVITIES FOR THE PURPOSE OF GR ANT OF REGISTRATION U/S 12AA. THESE ARE THE ISSUES WHICH ARE LEFT TO THE AO FOR ASSESSMENT STAGE IN COMPUTING THE INCOME OF THE SOCIETY. FOR THIS RELIANCE IS PLACED ON THE FOLLOWIN G CASES: (I) CIT VS. RED ROSE SCHOOL (2007) 163 TAXMAN 19 (AL L.) (II) SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST VS . DIRECTOR OF INCOME-TAX (EXEMPTIONS) (2006) 285 ITR 327 (KAR.) (III) CIT & ANR. VS. KUPPARAJU BROTHERS CHARITABLE FOUNDATION TRUST (2012) 69 DTR 315 (KAR.)(HC). (IV) TAGORE CHILDREN ACADEMY ITA NO. 103/JP/09 DATED 19.06. 2009 (JAIPUR BENCH). (V) DCIT VS. COSMOPOLITAN SOCIETY 244 ITR 494 (RAJ). (VI) MAHARASHTRA ACADEMY OF ENGINEERING & EDUCATION AL RESEARCH (MAEER) VS. CIT 133 TTJ & 706(PUNE) ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 7 SO FAR AS VARIOUS OBSERVATIONS MADE BY THE LD. CIT A RE CONCERNED, THOUGH THEY ARE NOT RELEVANT FOR GRANT O F REGISTRATION U/S 12AA, THE SAME IS EXPLAINED AS UND ER: A) ON GENUINENESS OF THE DEPOSITS (I) IN COURSE OF THE WORKING OF THE SOCIETY CERTAIN LOAN S WERE RAISED BY IT THROUGH ITS CHAIRMAN AND THE SECRETARY . THE LOANS WHICH WERE RAISED AND OUTSTANDING AS ON 31.03.2 013 IS AT PB 35-36. THE CONFIRMATIONS OF THESE PERSONS WERE FILED. THE ACIT, CIRCLE JHUNJHUNU WAS REQUIRED TO EXAMINE SIX PERSONS AS MENTIONED AT PG 2 OF THE ORDER. THE ACIT V IDE LETTER DT. 13.06.2014 FIXED THE DATE OF HEARING ON 20.06.2014. THIS LETTER WAS RECEIVED BY THE ASSESSEE ON 19.06.2014 AND THEREFORE THE ASSESSEE VIDE ITS REPL Y DATED 20.6.2014 (PB 79-80) FILED THE PAN/ VOTER IDENTITY CARD/ ITR AS THE CASE MAY BE IN RESPECT OF SUCH PERSONS. THERE AFTER THE CIT REQUIRED THE ASSESSEE TO PRODUCE THESE PERSO NS BEFORE HIM ON 27.06.2014. ON THIS DATE ASSESSEE PRO DUCED TWO PERSONS NAMELY SHRI BANWARI LAL BHASKAR AND SH. R EKH SINGH GARWAL WHO HAVE GIVEN LOAN OF RS.12 LACS AND RS .18 LACS RESPECTIVELY. IN THEIR STATEMENT THEY ACCEPTED GIVING LOAN TO THE ASSESSEE SOCIETY. THESE STATEMENTS ARE MADE PART OF THE ASSESSMENT ORDER AS ANNEXURE A & ANNEXU RE C. THEREFORE, ONCE THEY HAVE ACCEPTED HAVING GIVING THE LOAN AND ALSO EXPLAINED THE SOURCE, THE LOAN RECEIVED FR OM THEM CANNOT BE DOUBTED. THE FURTHER OBSERVATION OF THE CI T THAT ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 8 THE SIGNATURE OF BANWARI LAL AS PER THE CONFIRMATION AND AS PER THE PAN NO. DO NOT TALLY (ANNEXURE B OF THE ORD ER) IS IRRELEVANT ONCE HE HAS APPEARED BEFORE THE CIT AND ACCEPTED HAVING BEEN GIVEN LOAN TO THE SOCIETY. THE LOAN GIVEN BY BANWARI LAL IS VERIFIABLE FROM HIS STATEMEN T OF AFFAIRS PLACED AT PB 84-85. IN THESE CIRCUMSTANCES THE VARIOUS OBSERVATIONS MADE BY THE CIT WITH REFERENCE T O THE STATEMENT OF THESE TWO PERSONS ARE IRRELEVANT. (II) IN RESPECT OF REMAINING FOUR PERSONS REQUIRED TO BE PRODUCED BY THE CIT, SUFFICIENT TIME WAS NOT PROVIDED TO PRODU CE THEM. HOWEVER, THE GENUINENESS OF THE LOAN TAKEN FRO M THE BANK AND THEIR CREDITWORTHINESS IS PROVED FROM THE DOCUMENTS PLACED AT PB 113-115. THEREFORE, THE LOAN TAKEN FROM THESE FOUR PERSONS CANNOT BE HELD NON GENUINE. (III) THE ASSESSEE SOCIETY HAS ALSO RECEIVED LOAN FROM 200 PERSONS OF RS.19,500/- EACH. THESE LOANS WERE TAKEN F OR A TEMPORARY PERIOD AND REPAID IN THE YEAR ITSELF AS I S EVIDENT FROM ANNEXURE D ENCLOSED WITH THE ORDER. OUT OF THES E PERSONS WITHIN A SHORT PERIOD OF TWO DAYS PROVIDED BY THE CIT, THE ASSESSEE FILED CONFIRMATION IN RESPECT OF 5 3 DEPOSITORS. THE CONFIRMATION OF THE REMAINING DEPOSI TORS ALONG WITH THE PROOF OF THEIR IDENTITY AND THEIR CREDITWORTHINESS HAS SINCE BEEN OBTAINED WHICH IS AVA ILABLE IN THE PAPER BOOK. IN CASE OF CONFIRMATION OF ONE D EPOSITOR SH. MAHENDRA SINGH, THE CIT HAS OBSERVED THAT THERE IS ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 9 DIFFERENCE IN SIGNATURE AS PER THE CONFIRMATION AND AS PER THE PASSPORT (REFER ANNEXURE E TO THE ORDER) IGNORI NG THAT THE PASSPORT WAS ISSUED IN 2003 AND THEREFORE THERE IS A SLIGHT VARIATION IN TWO SIGNATURES BUT THE SIGNATUR E ON THESE DOCUMENTS OTHERWISE TALLY. THEREFORE, THE GENUINENESS OF THESE DEPOSITS MERELY ON SURMISES AND CONJECTURES C ANNOT BE DOUBTED. (IV) THE STATEMENT OF SH. KURDA RAM, CHAIRMAN OF THE SOCI ETY (ANNEXURE F OF THE ORDER) WAS ALSO RECORDED IN THIS CONNECTION WHERE IN REPLY TO QUESTION NO. 11 HE HAS STATED THAT WHENEVER THE SOCIETY NEEDS THE FUNDS HE ARRANG ES THE SAME FROM HIS RELATIVES, FRIENDS AND KNOWN PERSONS. IN REPLY TO QUESTION NO.12 TO 16 AND 21 HE ALSO PROVIDED THE NAME AND ADDRESS OF SUCH PERSONS. IN REPLY TO QUESTION N O.17 TO 20 HE EXPLAINED THAT CERTAIN AMOUNT IS ARRANGED BY SH. ARUN KUMAR, MEMBER OF THE SOCIETY AND PROVIDED HIS FULL ADDRESS AND MOBILE NO. ALL THESE FACTS ESTABLISHED THE GENU INENESS OF THE DEPOSIT. THEREFORE, THE CIT WAS NOT CORRECT IN DOU BTING THE GENUINENESS OF THESE DEPOSITS. (V) OTHERWISE ALSO WHEN THE SOCIETY HAS OBTAINED THE DEP OSITS AND THE SAME IS UTILIZED FOR THE OBJECT OF THE TRUS T, THE ACTIVITY OF THE SOCIETY CANNOT HE HELD NON GENUINE BY SIMPLY DOUBTING THE GENUINENESS OF THE DEPOSITS ON MERE SU RMISES AND CONJECTURES. ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 10 B) ON ADVANCE GIVEN TO SH. HANUMAN RAM THE ASSESSEE SOCIETY VIDE LETTER DT. 20.06.2014 (PB 79) EXPLAINED THAT IT HAS ADVANCED RS.90,000/- TO SH. H ANUMAN RAM BY CHEQUE FOR SUPPLY OF SCHOOL FURNITURE. THE CONFIRMATION FROM HANUMAN RAM COULD NOT BE FILED AS THE TIME ALLOWED WAS ONLY TWO DAYS WHICH WAS VERY SHORT. HANUMAN RAM IS NOT CONNECTED WITH ANY OF THE MEMBERS OF THE ASSESSEE SOCIETY. THE ADVANCE WAS GIVEN IN PURSUA NCE OF THE OBJECT OF THE TRUST. OTHERWISE ALSO THE APPLICAT ION OF INCOME CANNOT BE A MATTER WHICH IS TO BE EXAMINED AT THE TIME OF GRANTING REGISTRATION TO THE TRUST AS HELD IN VARIOUS CASES STATED SUPRA. THEREFORE, THIS CANNOT BE A REAS ON TO DOUBT THE GENUINENESS OF THE ACTIVITIES OF THE TRUS T. C) EXPENDITURE ON PURCHASE OF DIESEL AND VEHICLE RUNNING EXPENSES (I) THIS ISSUE WAS RAISED BY CIT FOR FIRST TIME ON 24.06.2 014 WHEN THE ASSESSEE WAS ASKED TO GIVE THE DETAILS OF VE HICLES AND THE COPY OF BILLS OF DIESEL FOR FY 2012-13. THE SAME IS PROVIDED BEFORE THE CIT VIDE LETTER DT. 27.06.2012 ( PB 111- 112). FROM THE DETAILS FILED IT IS EVIDENT THAT THE ASSESSEE SOCIETY RUNS THE BUSES FOR COMMUTATION OF THE STUDE NTS ON COST TO COST BASIS. ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 11 (II) IN THE STATEMENT OF SH. KURDA RAM RECORDED ON 27.06 .2014 (ANNEXURE F OF THE ORDER) HE HAS EXPLAINED THAT THE SCHOOL RUNS 13 BUSES AND 1 TEMPO FOR COMMUTING THE STUDENT S. FOR CONTROL PURPOSE THE DIESEL IS PURCHASED FROM ONLY O NE PETROL PUMP, IT RAISES MONTHLY BILLS. HE ALSO EXPLAINED TH AT WHY THE DIESEL CONSUMPTION IN DIFFERENT MONTHS IS DIFFERENT . THE CIT, HOWEVER, BY REFERRING TO THESE BILLS AND BY NOTING T HAT ON DIFFERENT DATES IN THE MONTH, THE DIESEL PURCHASED IS OF THE SAME QUANTITY OBSERVED THAT THE DIESEL IS BOOKED AS PER CONVENIENCE AND NOT IN ACCORDANCE WITH CONSUMPTION A ND THE SAME IS ON EXCESSIVE SIDE. IN MAKING SUCH OBSER VATION NO EVIDENCE IS BROUGHT ON RECORD AS TO HOW THE CONSU MPTION OF DIESEL IS EXCESSIVE WITH REFERENCE TO THE DISTANC E COVERED BY EACH BUS ON DIFFERENT ROUTES IN A MONTH. THERE IS NO ALLEGATION/ EVIDENCE THAT THE AMOUNT HAS BEEN SIPHO NED OFF BY THE MEMBERS OF THE SOCIETY FOR THEIR OWN BENEFIT. THEREFORE, ONLY ON SURMISES AND CONJECTURES, THE EXP ENSES CLAIMED UNDER THIS HEAD CANNOT BE SAID TO BE EXCESS IVE SO AS TO REFUSE REGISTRATION U/S 12AA OF THE ACT. D) CONCESSION IN FEES (I) THE ASSESSEE SOCIETY IN ITS MINUTE DT. 15.06.2010 (P B 128) HAS RESOLVED THAT CONCESSION IN FEES BE ALLOWED TO T HE POOR AND TO INTELLIGENT STUDENTS. IT WAS ACCORDINGLY DECI DED THAT THE STUDENTS WHO SECURE 1 ST , 2 ND AND 3 RD RANK IN THEIR CLASS SHOULD BE ALLOWED CONCESSION IN THEIR FEES. SIMILARL Y, ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 12 CONCESSION OF 25% ON TUITION FEES IS ALLOWED TO THE SECOND CHILD OF THE PARENT IF BOTH THE CHILD STUDY IN THE SCHOOL OF THE ASSESSEE AND IN CASE THREE CHILDREN OF THE PARENT S TUDY IN THE SCHOOL RUN BY THE ASSESSEE, CONCESSION OF 50% O F THE TUITION FEES IS GIVEN TO THE FIRST CHILD. SOME STUD ENTS ARE ALSO GIVEN FREE EDUCATION AS PER THE DETAILS FURNISHED A T PB 57-59. (II) THE CIT HAS OBSERVED THAT CONCESSION IN FEES IS GIVEN TO THE SONS OF THE TWO MEMBERS OF THE SOCIETY IGNORING THAT THESE STUDENTS HAVE SECURED SECOND RANK IN THEIR CLASS (P B 54 & 102) AND THEREFORE THEY WERE ALLOWED CONCESSION IN TH E FEES AS ALLOWED TO OTHER STUDENTS. IT IS NOT THE CASE OF THE CIT THAT CONCESSION IN THE FESS IS NOT GIVEN TO THE STU DENTS AND THEREFORE SIMPLY ON THE ALLEGATION THAT THERE IS AB SENCE OF PROPER GUIDELINES/ DOCUMENTS OR TRANSPARENCY IN THE MATTER OF GIVING CONCESSION IN THE FEES, THE ACTIVITIES OF THE SOCIETY CANNOT BE SAID TO BE NON GENUINE AS TO DENY REGISTR ATION U/S 12AA. THE LD. A/R THUS ARGUED THAT ON NONE OF THE ISSUES R AISED BY THE CIT, IT CAN BE HELD THAT THE ACTIVITIES OF THE SOCIETY IS NOT GENUINE MORE PARTICULARLY WHEN HE HAS NOT DOUBTED TH AT THE EDUCATION HAS BEEN IMPARTED BY THE ASSESSEE SOCIETY TO THE STUDENTS. THEREFORE, HE PRAYED THAT THE CIT BE DIREC TED TO GRANT REGISTRATION U/S 12AA TO THE ASSESSEE SOCIETY . ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 13 5. AT THE OUTSET, THE LD. DR VEHEMENTLY SUPPORTED T HE ORDER OF LD. CIT. IT WAS CONTENDED THAT U/S 12AA THE CIT IS TO SATISFY HIMSELF ABOUT THE OBJECT OF THE TRUST AND GENUINENESS OF TH E ACTIVITIES BEFORE GRANTING THE REGISTRATION. IN THIS CASE CIT HAS BROU GHT ENOUGH MATERIAL ON RECORD TO SHOW THAT ACTIVITIES OF THE ASSESSEE AR E NOT GENUINE AND THEREFORE THE ORDER OF CIT BE UPHELD. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS A FACT ON REC ORD THAT THE ONLY OBJECT OF THE ASSESSEE IS TO PROMOTE AND IMPART EDU CATION AND IN PURSUANCE TO THE SAME IT IS RUNNING A SECONDARY SCH OOL AFFILIATED WITH CENTRAL BOARD OF SECONDARY EDUCATION, NEW DELHI. THE LD. CIT HAS SATISFIED HIMSELF WITH THE OBJECT OF THE ASSESSEE BU T HE IS NOT SATISFIED WITH THE GENUINENESS OF THE ACTIVITIES CARRIED OUT B Y IT FOR THE REASONS MENTIONED IN HIS ORDER. AS PER SECTION 12AA OF THE ACT, THE COMMISSIONER IS TO SATISFY HIMSELF ABOUT THE OBJECT OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES B EFORE GRANTING EXEMPTION U/S 12AA. WE FIND THAT ONLY BECAUSE AS PE R THE LD. CIT, THE ASSESSEE HAS RAISED DEPOSITS FROM VARIOUS PERSONS O R IT HAS GIVEN AN ADVANCE OF RS. 90,000/- TO SH. HANUMAN RAM OR THAT EXPENDITURE ON PURCHASE OF DIESEL DO NOT COMMENSURATE WITH THE BUS FEES CHARGED OR ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 14 THAT FEES CONCESSION IS GIVEN TO THE SEVERAL STUDEN TS BUT BASIS FOR SUCH CONCESSION IS EVIDENT, CANNOT BE A BASIS TO DOUBT, THE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE ASSESSEE MORE PAR TICULARLY WHEN THE FACT OF THE EDUCATION BEING IMPARTED BY IT TO THE S TUDENTS IS NOT IN DOUBT AND THE ASSESSEE HAS GIVEN THE EXPLANATION IN RESPECT OF THE ISSUES RAISED BY THE LD. CIT. ALL THE ISSUES RAISED BY THE LD. CIT ARE THE MATTERS WHICH ARE TO BE CONSIDERED BY THE AO IN THE ASSESSMENT PROCEEDINGS AND FOR THAT REASON IT CANNOT BE HELD T HAT ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE. THE ITAT PUNE BENCH IN CASE OF MAHARASHTRA ACADEMY OF ENGINEERING AND EDUCATIONAL RESEARCH VS. CIT 133 TTJ 706 WITH REFERENCE TO CANCELLATION OF REGISTRATION U/S 1 2AA(3) HAS HELD THAT THIS SECTION CONFINES TO INQUIRE ABOUT THE ACTIVITI ES OF THE TRUST AND ITS GENUINENESS, WHICH MEANS, IN CONSONANCE WITH THE OBJE CTS FOR WHICH CREATED AND THOSE OBJECTS AS ALSO THE ACTIVITIES SH OULD NOT BE A CAMOUFLAGE BUT PURE, SINCERE, CHARITABLE AND FOR PU BLIC UTILITY AT LARGE. THE LD. CIT IS NOT TO ENTER INTO THE AREA OF INVESTIG ATION OF SOURCE OF INCOME AND ALSO APPLICATION OF INCOME, SO THAT THE AMOUNT OF CORRECT EXEMPT INCOME BE PREJUDGED. THE VARIOUS CASES RELIED SUPRA BY THE AR ALSO LAYS DOWN THE SIMILAR PRINCIPLE OF LAW. THEREFORE THE ACTIVITIES OF THE ASSESSEE CANNOT BE HELD TO BE NON GENUINE ON TH E REASONS ITA 506/JP/2014_ CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN VS. CIT-III 15 MENTIONED BY THE LD. CIT. ACCORDINGLY, WE DIRECT THE LD. CIT TO ALLOW REGISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/02/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 27 TH FEBRUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- CHOUDHARY GHARSIRAM MEMORIAL SHIKSHAN SANSTHAN, SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE CIT-III, JAIPUR 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 506/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR