M/s. J K Educational Samiti, Gohana V. CIT, Rohtak

ITA 6251/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91055 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-05-2015
• Assessment Year: misc
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Charitable institution; Opportunity of being heard; Question of law
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D, NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.6251 /DEL/2013 ASSESSMENT YEAR : J K EDUCATION SAMITI, VS. CIT, ROHTAK JKR PUBLIC SCHOOL, GUDHA ROAD, GOHANA 131301 GIR / PAN: (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN, CA RESPONDENT BY : MS. SULEKHA VERMA, CIT DR DATE OF HEARING : 12.05.2015 DATE OF PRONOUNCEMENT :_____________ ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE RE FUSAL FOR GRANTING REGISTRATION U/S 12A(1)(AA) OF THE I. T. ACT, 1961. THE ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL HOWEVER THE CRUX OF GRIEVANCE OF ASSESSEE IS THE REFUSAL OF CIT FOR GRANTING REGISTRATION U/S 12A(1)(AA). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT AND THE SOCIET Y WAS REGISTERED VIDE CERTIFICATE DATED 24.08.2000. THE AIMS AND OBJECTS AS NOTED IN THE AMENDED CONSTITUTION OF THE SOCIETY WE..F. 15.06.2010 AS PL ACED IN PAPER BOOK PAGE 3 ONWARDS, IS TO RUN SCHOOLS BESIDE OTHER ALLIED OBJE CTS. LD. A.R. AT THE OUTSET SUBMITTED THAT APPLICATION FOR REGISTRATION U/S 12A (1)(AA) WAS DULY FILED IN ITA NO.6251/DEL/2013 2 FORM 10A ALONG WITH AUDITED ACCOUNTS FOR THE PAST 3 YEARS. HOWEVER, LD. CIT HAS REFUSED TO GRANT REGISTRATION ON THE BASIS THAT OBJECTS WERE NOT CHARITABLE IN NATURE AND FURTHER HOLDING THAT THE A SSESSEE WAS CHARGING HEFTY FEES AND THEREFORE, WAS NOT MAKING ANY CHARITY AND INSTEAD WAS EARNING HUGE PROFITS. IN THIS RESPECT, LD. A.R. TOOK US TO A CO PY OF AUDITED ACCOUNTS FOR THE YEARS ENDED 2010-11 TO 2012-13 PLACED IN PAPER BOOK PAGES 33-77 AND INVITED OUR ATTENTION TO THE FACT THAT ASSESSEE WAS NOT EARNING HUGE PROFITS AND CIT HAS CONSIDERED GROSS RECEIPTS ONLYWHEREAS T HE NET PROFITS EARNED BY THE ASSESSEE WERE MARGINAL AT RS.19479/-, RS.4,15,5 79/- AND RS.5,43,905/- RESPECTIVELY IN THE YEAR ENDING 31.03.2010, 31.03.2 011 AND 31.03.2012. HE FURTHER SUBMITTED THAT SUCH PROFITS EARNED BY THE A SSESSEE WERE RE-INVESTED IN THE SCHOOL IN THE FORM OF ADDITIONAL FIXED ASSETS W HICH ITSELF WAS A CHARITABLE PURPOSE. LD. A.R. INVITED OUR ATTENTION TO VARIOUS REPLIES FILED BY IT DURING PROCEEDINGS BEFORE CIT AND HIGHLIGHTED THAT ALL THE QUERIES RAISED BY THE COMMISSIONER WERE DULY REPLIED TO AND ORIGINAL CERT IFICATE OF REGISTRATION OF SOCIETY WAS ALSO PRODUCED FOR HIS VERIFICATION. LD . A.R. SUBMITTED THAT THE ISSUE IS DULY COVERED IN FAVOUR OF ASSESSEE AS VARI OUS HON'BLE HIGH COURTS HAS HELD THAT AT THE TIME OF REGISTRATION, THE COMM ISSIONER HAS TO EXAMINE THE OBJECTS OF THE SOCIETY AND IF THE OBJECTS OF THE SO CIETY ARE FOUND TO BE CHARITABLE IN NATURE THEN HE IS BOUND TO GRANT REGI STRATION UNDER THE ACT. IN THIS RESPECT, HE INVITED OUR ATTENTION TO VARIOUS C ASE LAWS AS PLACED IN PAPER BOOK PAGES 1-83. OUR SPECIFIC ATTENTION WAS INVITE D TO HON'BLE SUPREME COURT ORDER IN THE CASE OF QUEENS EDUCATIONAL SOCI ETY VS CIT 275 CTR 449 PLACED AT PAPER BOOK PAGE 4-15. LD. A.R. SUBMITTED THAT HON'BLE SUPREME COURT HAS SETTLED THE ISSUE REGARDING REGISTRATION U/S 12AA REVERSING THE ORDER OF UTTARAKHAND HIGH COURT. LD. A.R. SUBMITTE D THAT THE ITA NO.6251/DEL/2013 3 COMMISSIONER HAD RAISED OBJECTION THAT UNSECURED LO ANS WERE NOT CONFIRMED WHEREAS CONFIRMATION FROM ALL UNSECURED LENDERS WER E FILED VIDE LETTER DATED 29.04.2013 AS PLACED IN PAPER BOOK PAGE 20. 3. LD. D.R. ON THE OTHER HAND SUBMITTED THAT THE CO MMISSIONER IS EMPOWERED TO REFUSE REGISTRATION WHERE HE FINDS THA T THE ACTIVITIES WERE NOT GENUINE. IN THIS RESPECT, SHE SUBMITTED THAT OBSER VATIONS OF CIT ARE VERY IMPORTANT WHEREIN HE HAS RAISED CERTAIN IMPORTANT O BJECTION REGARDING CHARGING OF HEFTY FEES AND REGARDING THE EXPLANATIO N AND SOURCE OF UNSECURED LOANS OBTAINED BY ASSESSEE. MOREOVER, SHE ARGUED T HAT ASSESSEE HAS PLACED AMENDED CONSTITUTION AND ORIGINAL HAS NOT BEEN FILE D AND EXAMINATION OF ORIGINAL CONSTITUTION IS VERY IMPORTANT IN THIS CAS E. LD. D.R. IN THIS RESPECT FILED A COPY OF JUDGEMENT OF HON'BLE HIGH COURT OF UTTARAKHAND IN THE CASE OF NATIONAL INSTITUTE OF AERONAUTICAL ENGINEERING E DUCATIONAL SOCIETY REPORTED IN 181 TAXMAN 205 (UTTARANCHAL) AND SUBMIT TED THAT THE FACTS IN THE ABOVE NOTED CASE AS DECIDED BY HON'BLE HIGH COURT A RE PERI-MATERIA WITH THE FACTS IN THE PRESENT CASE AND THEREFORE, FOLLOW ING THE ABOVE SAID DECISION OF HON'BLE HIGH COURT, APPEAL FILED BY ASSESSEE NEE DS TO BE DISMISSED. 4. LD. A.R. IMMEDIATELY INTERRUPTED AND INVITED OUR ATTENTION TO THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF Q UEENS EDUCATIONAL SOCIETY 275 CTR 449PLACED AT PAGES 4-15 OF THE PAPE R BOOK AND SUBMITTED THAT THE FINDINGS OF HON'BLE HIGH COURT IN THE CASE LAW AS RELIED UPON BY LD. D.R. HAS BEEN REVERSED BY HON'BLE SUPREME COURT IN THIS CASE. LD. D.R. INTERRUPTED AND ARGUED THAT THE SAID JUDGEMENT OF H ON'BLE SUPREME COURT IS WITH RESPECT TO EXEMPTION U/S 10(23C)(IIIAD) OF I. T. ACT, 1961 WHEREAS THE PRESENT CASE IS WITH RESPECT TO REGISTRATION U/S 12 AA WHICH DEALS WITH EXEMPTION U/S 11 AND THEREFORE SUBMITTED THAT THE C ASE LAW CITED BY LD. A.R. IS NOT COMPARABLE. LD. A.R. SUBMITTED THAT U/S 10( 23C)(IIIAD) THE EXEMPTION ITA NO.6251/DEL/2013 4 IS ALLOWED TO INSTITUTIONS WHERE THE TURNOVER IS LE SS THAN RS.1 CRORES AND WHERE THE TURNOVER EXCEEDS RS. ONE CRORE, THE EXEMP TION IS AVAILABLE U/S 11 AND 12 SUBJECT TO REGISTRATION U/S 12AA. HE SUBMIT TED THAT THOUGH THE CASE LAW OF QUEENS EDUCATIONAL SOCIETY IS WITH RESPECT TO SECTION 10(23C)(IIIAD) BUT THE HONBLE APEX COURT HAS HELD THAT IT IS DIFF ICULT FOR AN INSTITUTION TO CARRY OUT AN ACTIVITY IN SUCH A WAY THAT NO PROFIT ACCRUES TO THE INSTITUTION AND HAS FURTHER HELD THAT MERE EARNING OF PROFITS I N THE COURSE OF CHARITABLE ACTIVITIES CANNOT BE A REASON TO DENY REGISTRATION. THEREFORE, HE ARGUED THAT THE RATIO OF HON'BLE SUPREME COURT DECISION IS SQUA RELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT SECTION 12AA DEALS WITH TH E PROCEDURE FOR REGISTRATION WHICH INTER ALIA PROVIDES THAT ON AN A PPLICATION FILED BY ASSESSEE, THE COMMISSIONER OF INCOME TAX WILL MAKE CERTAIN QU ERIES AS HE MAY DEEM NECESSARY IN THIS RESPECT AND AFTER GETTING SATISFI ED ABOUT THE OBJECTS OF THE SOCIETY/INSTITUTION AND THE GENUINENESS OF ACTIVITI ES, HE SHALL PASS AN ORDER IN WRITING REGISTERING THE INSTITUTION OR ON NON SATIS FACTION, REFUSING THE REGISTRATION THEREOF AS THE CASE MAY BE. HOWEVER, BEFORE PASSING ORDER FOR REFUSAL OF REGISTRATION, THE ASSESSEE WILL BE PROVI DED REASONABLE OPPORTUNITY OF BEING HEARD. THEREFORE, FROM THE ABOVE PROVISIO N OF LAW, WE FIND THAT AT THE TIME OF REGISTRATION U/S 12AA, THE COMMISSIONER IS ONLY REQUIRED TO EXAMINE THE OBJECTS OF THE SOCIETY / INSTITUTION AS WELL AS GENUINENESS OF ACTIVITIES OF THE ASSESSEE AND IF HE FINDS THAT THE OBJECTS OF THE SOCIETY ARE CHARITABLE, AND THE ACTIVITIES AS STATED IN THE OBJ ECT CLAUSE OF THE SOCIETY ARE BEING CARRIED OUT, THEN HE IS BOUND TO GRANT REGIST RATION U/S 12AA OF THE ACT. HON'BLE HIGH COURT OF UTTARAKHAND AS RELIED UPON BY LD. D.R. IN THE CASE OF CIT VS NATIONAL INSTITUTE OF AERONAUTICS AND EDUCAT ION 181 TAXMAN 205 ITA NO.6251/DEL/2013 5 HAS HELD THAT WHERE THE ASSESSEE WAS EARNING PROFIT S BY CHARGING HEFTY FEES, THE ASSESSEE CANNOT BE SAID TO BE ENGAGED IN CHARIT ABLE ACTIVITIES AND WAS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. HOW EVER, THE HON'BLE SUPREME COURT IN THE CASE OF QUEENS EDUCATIONAL SO CIETY VS CIT 245 CTR 449 HAS HELD THAT MERE EARNING OF PROFIT CANNOT BE THE REASON FOR NOT ALLOWING REGISTRATION UNDER THE PROVISIONS OF SECTI ON 12AA. THE FINDINGS OF HON'BLE SUPREME COURT AS CONTAINED IN PARA 19 ARE R EPRODUCED BELOW: IT IS CLEAR, THEREFORE, THAT THE UTTARAKHAND HIGH COURT HAS ERRED BY QUOTING A NON-EXISTENT PASSAGE FROM AN APPLICABLE J UDGMENT, NAMELY, ADITANAR AND QUOTING A PORTION OF A PROPERTY TAX JU DGMENT WHICH EXPRESSLY STATED AT RULINGS ARISING OUT OF THE INCO ME TAX ACT WOULD NOT BE APPLICABLE. QUITE APART FROM THIS, IT ALSO W ENT ON TO FURTHER QUOTE FROM A PORTION OF THE SAID PROPERTY TAX JUDGM ENT WHICH WAS RENDERED IN THE CONTEXT OF WHETHER AN EDUCATIONAL S OCIETY IS SUPPORTED WHOLLY OR IN PART BY VOLUNTARY CONTRIBUTIONS, SOMET HING WHICH IS COMPLETELY FOREIGN TO SECTION 10(23C) (IIIAD). THE FINAL CONCLUSION THAT IF A SURPLUS IS MADE BY AN EDUCATIONAL SOCIETY AND PLOUGHED BACK TO CONSTRUCT ITS OWN PREMISES WOULD FALL FOUL OF SE CTION 10(23C) IS TO IGNORE THE LANGUAGE OF THE SEC 'ON AND TO IGNORE TH E TESTS LAID DOWN IN THE SURAT ART SILK CLOTH CASE, ADITANAR CASE AND TH E AMERICAN HOTEL AND LODGING CASE. IT IS CLEAR THAT WHEN A SURPLUS I S PLOUGHED BACK FOR EDUCATIONAL PURPOSES, THE EDUCATIONAL INSTITUTION E XISTS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT . IN FACT, IN S.RM.M.CT.M. TIRUPPANI TRUST V. COMMISSIONER OF INC OME TAX, (1998) 2 SCC 584, THIS COURT IN THE CONTEXT OF BENE FIT 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 P ROFIT IN THE COURSE OF CARRYING OUT CHARITABLE ACTIVITIES CANNOT BE A REAS ON FOR NOT GRANTING REGISTRATION U/S 12AA OF THE ACT. ITA NO.6251/DEL/2013 6 7. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT BHATINDA VS BABA DEEP SINGH EDUCATIONAL SOCIETY VIDE ORDER D ATED 13.10.2011 HAS HELD THAT THE JURISDICTION OF THE COMMISSIONER AT T HE STAGE OF PROCESSING APPLICATION U/S 12AA OF THE ACT IS TO EXAMINE THE G ENUINENESS OF THE OBJECTS OF THE TRUST, WHETHER THEY ARE GENUINE AND IN CONSO NANCE WITH THE OBJECTS 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 DISPUTED, THE SAME WAS A GENUINE ACTIVITY AND THE ENQUIRY REG ARDING GENUINENESS OF THE ACTIVITIES CANNOT BE STRETCHED BEYOND THIS. TH E RELEVANT FINDINGS OF PUNJAB AND HARYANA HIGH COURT ARE REPRODUCED AS UND ER: 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 WAS DECLIN ED BY THE COMMISSIONER OF INCOME TAX, BATHINDA (FOR SHORT 'TH E CIT') VIDE ORDER DATED 25.9.2009. THE CIT CAME TO', THE CONCLU SION AFTER EXAMINING THE INCOME AND EXPENDITURE AND THE BALANC E SHEET FOR THE PERIOD ENDING ON 31.3.2006, 31.03.2007 AND 31.3.200 8 THAT THE SOCIETY 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 POLYTECHNIC COL LEGE FURTHER TOOK INTO CONSIDERATION THAT THE SOCIETY WAS EARNING PRO FITS FOR THE LAST TWO YEAR AND HAD CLAIMED EXEMPTION UNDER SECTION 10(23C ) OF THE ACT. THE REASONS TO SWITCH OVER TO SECTION 11 OF THE ACT REMAINED UNEXPLAINED FOR CLAIMING EXEMPTION UNDER SECTION 12 AA OF THE ACT AND WHILE TAKING INTO CONSIDERATION SECTION 2 (15) OF THE ACT THE CIT CAME TO THE CONCLUSION THAT SINCE THE SOCIETY WAS C HARGING BUILDING FUND, DEVELOPMENT FUND, SPORTS FUND AND TRANSPORTAT ION COSTS ETC., THE SAME COULD NOT BE TERMED AS CHARITABLE ACTIVITY BY ANY DEFINITION. 3. THE SOCIETY PREFERRED AN APPEAL BEFORE THE INCOM E TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR (HEREINAFTER REF ERRED TO AS 'THE TRIBUNAL') WHICH HAS ALLOWED THE APPEAL OF THE SOCI ETY AND HAS SET ASIDE THE ORDER PASSED BY THE CIT AND DIRECTED THAT REGISTRATION APPLIED FOR BY THE APPELLANT UNDER SECTION 12AA OF THE ACT BE GRANTED. THE PRESENT APPEAL IS DIRECTED AGAINST THE SAID ORD ER AND THE FOLLOWING QUESTIONS OF LAW HAVE BEEN FORMULATED BY THE REVENUE:- ITA NO.6251/DEL/2013 7 '1. WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ID. ITA T WAS RIGHT IN LAW TO RESTRICT THE POWERS OF THE CIT FOR MAKING THE ENQUIRIES U/S 12AA(A) OF THE ACT DESPITE THE FACT T HAT THE SAID SECTION PROVIDES THAT THE CIT CAN MAKE SUCH ENQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF. 2. WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ID. ITA T WAS RIGHT IN LAW IN GRANTING REGISTRATION TO THE AS SESSEE TRUST WHEN NO WORK OF RELIEF TO THE POOR IN THE FIELD OF EDUCATIO N WAS DONE AS PER DEFINITION OF 'CHARITABLE 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 T O EDUCATION WHICH HAVE NOT BEEN CONSIDERED WHILE DECLINING THE APPLIC ATION UNDER SECTION 12AA OF THE ACT. IT WAS FURTHER HELD THAT T HE CIT SHOULD HAVE ONLY SEEN THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY AND CIRCULAR NO.11/2008 DATED 19.12.2008 WAS ALSO REFERRED THAT THE PROVISIONS OF SECTION 2(15) OF THE ACT ARE NOT APPLICABLE TO A SO CIETY. ACCORDINGLY, IT WAS HELD THAT NATURE AND SCOPE AT THE STAGE OF GRAN T OF REGISTRATION UNDER SECTION 12AA OF THE ACT IS TO ONLY REGARDING THE OBJECTS OF THE SOCIETY. THE TRIBUNAL ALSO DISTINGUISHED THE PROVIS IONS OF SECTIONS 10(23C) AND 12AA OF THE ACT AND SCOPE OF THE SAID S ECTIONS AND HELD THAT IT WAS OPEN TO THE REVENUE AUTHORITIES WHILE P ROCESSING THE RETURN OF THE INCOME OF THOSE ASSESSEES TO EXAMINE THEIR C LAIM UNDER SECTIONS 11 AND 13 OF THE ACT AND GIVE SUCH TREATMENT TO THO SE SOCIETIES AS WARRANTED BY THE FACTS OF THE CASE. THE POWER OF TH E REVENUE AUTHORITIES TO CANCEL REGISTRATION UNDER SECTION 12 AA (3) OF THE ACT WAS ALSO TAKEN INTO CONSIDERATION ON THE GROUND THA T SAME CAN BE RESORTED TO IF THE COMMISSIONER IS SATISFIED THAT T HE ACTIVITY OF SUCH SOCIETY OR INSTITUTION ARE NOT GENUINE OR ARE NOT B EING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY/INSTITUT ION. 5. THE POWER OF THE CIT REGARDING THE SCOPE OF SECT ION 12AA OF THE ACT HAS BEEN CONSIDERED BY THIS COURT IN THE ORDER DATED 5.10.2011 PASSED IN CIT VS. SURYA EDUCATIONAL & CHARITABLE TR UST [2011] 203 TAXMAN 53/15 TAXMANN.COM 123 (PUNJ. & HAR.) AND IT HAS BEEN HELD THAT SECTION 12AA OF THE ACT, REQUIRES SATISFACTION IN RESPECT OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, WHICH I NCLUDES THE ACTIVITIES ITA NO.6251/DEL/2013 8 WHICH THE TRUST WAS UNDERTAKING AT PRESENT 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 COMMISS IONER 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 COM MISSIONER AT THE STAGE OF PROCESSING APPLICATION UNDER SECTION 12AA OF THE ACT IS LIMITED REGARDING WHETHER THE ACTIVITIES ARE GENUIN E AND IN CONSONANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION AND WHERE EDUCATION IS BEING IMPARTED AS PER THE RULES AND TH E FACTUM OF THE ESTABLISHMENT AND RUNNING OF SCHOOLS IS NOT DISPUTE D THE SAME WAS A GENUINE ACTIVITY AND THE ENQUIRY REGARDING GENUINEN ESS OF THE ACTIVITIES CANNOT BE STRETCHED BEYOND THIS. 7. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT WOU LD BE CLEAR THAT RESPONDENT-SOCIETY WHICH WAS ADMITTEDLY RUNNING A P OLYTECHNIC 90LLEGE AND THE ACTIVITIES WERE INTERWOVEN FOR FURT HERING THE PROJECTS AND ACTIVITIES PERTAINING TO EDUCATION, THE TRIBUNA L RIGHTLY DIRECTED THAT REGISTRATION SHOULD BE GRANTED TO THE RESPONDE NT- SOCIETY WITH THE 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 WHILE PROCESSING THE APPL ICATION UNDER SECTION' 12AA OF THE ACT WAS NOT TO ACT AS AN ASSES SING AUTHORITY AND THUS, THE TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL F ILED BY THE 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 COU RT AND THE ORDER DATED 31.3.2010 PASSED BY THE TRIBUNAL IS UPHELD. C ONSEQUENTLY, 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 AND 285/2012 DATED 2.5.2013, UNDER SIMILAR CIRCUMSTANCES, 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 TH E INCOME OF THE TRUST FOR CHARITABLE OR RELIGIOUS PURPOSES. THE STAGE FO R APPLICATION OF INCOME IS YET TO ARRIVE I.E. WHEN SUCH TRUSTS OR IN STITUTION FILES ITS RETURN. THEREFORE, WE FIND THAT THE JUDGEMENT REFE RRED TO BY THE ITA NO.6251/DEL/2013 9 LEARNED COUNSEL FOR THE APPELLANTS ARE NOT APPLICAB LE TO THE FACTS OF THE PRESENT CASE ARISING OUT OF THE QUESTION OF REG ISTRATION 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 ASSESSMENT ORDER OF EARLIER YEARS PLACED AT PAPER BOOK PAGES 124-126 AND MOREOVER THE OBJECT CLAUSE A S PLACED IN PAPER BOOK 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 RESPECT TO OBJECTS CLAUSE DOES NOT HOLD MUCH F ORCE AS A.O. IN ASSESSMENT ORDERS OF EARLIER YEARS (AS PLACED IN PA PER BOOK PAGES 124-126) HAS NOTED THAT SOCIETY WAS RUNNING A SCHOOL. IN VI EW OF ABOVE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE JUDGEMENTS AS NOTE D ABOVE, WE DIRECT THE 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 ASSESSEE WITH A VIEW TO EXAMINE ANY VIO LATION OF THE ACT AND CAN DISALLOW EXEMPTION U/S 11 IF ANYTHING ADVERSE IS FO UND. 10. IN VIEW OF ABOVE, APPEAL FILED BY ASSESSEE IS A LLOWED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAPOO R) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 20 TH MAY, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.6251/DEL/2013 10 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 13/5 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 14/5 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 20/5/15 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 20/5 SR. PS/PS 7 FILE SENT TO BENCH CLERK 20/5 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER