Srinivasa Educational Society, Rajahmundry V. THE CIT, Rajahmundry

ITA 67/VIZ/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0248 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-09-2015
• Assessment Year: misc
• Appeal Filed On: 04-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CH OMKARESWAR
• Keywords: Charitable institution; Condonation of delay
• Section: 143(3); 12A; 12AA; 10; 11

Judgement Text

ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.67/VIZAG/2014 ( / ASSESSMENT YEAR : NA ) SRINIVASA EDUCATIONAL SOCIETY RAJAHMUNDRY VS. CIT RAJAHMUNDRY [ PAN: AAFTS3472G ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR -., / / RESPONDENT BY : SHRI CH. OMKARESWAR, CIT(DR) / 3 / DATE OF HEARING : 1 6 .09.2015 / 3 / DATE OF PRONOUNCEMENT : 30.09.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE OR DER OF THE CIT, RAJAHMUNDRY DATED 28.11.2013. THERE IS A DELAY IN FILING THE APPEAL FOR 26 DAYS. THE LD. COUNSEL FOR THE ASSESSEE FILED AN APPLICATION FOR CONDONATION OF DELAY AND SUBMITTED THAT THE DELAY I N FILING OF THE APPEAL ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 2 IS NOT INTENTIONAL AND IT IS BEYOND HIS CONTROL. O N THE OTHER HAND, THE LD. D.R. OBJECTED FOR THE CONDONATION OF DELAY. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORDS AND WE FIND THAT THERE I S A JUSTIFIED REASON FOR NON-FILING OF THE APPEAL WITHIN A TIME AND THEREFOR E, THERE IS A DELAY OF 26 DAYS. WE FIND IT IS A GENUINE CASE TO CONDONE TH E DELAY. ACCORDINGLY, DELAY IS CONDONED. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE SOCIETY NAM ELY SRINIVASA EDUCATIONAL SOCIETY FILED AN APPLICATION FOR REGIS TRATION U/S 12A OF THE INCOME-TAX ACT (HEREINAFTER CALLED ACT) ALONG WIT H FORM NO.10A ON 14.6.2013 BEFORE THE COMMISSIONER OF INCOME-TAX, RA JAHMUNDRY WITH THE FOLLOWING OBJECTS:- 1. THIS SOCIETY IS ORGANIZED TO ESTABLISH EDUCATIONAL INSTITUTIONS TO SERVE THE POOR PEOPLE. 2. TO BRING THE ACADEMIC, TECHNICAL AND MEDICAL EDUCAT ION TO THE POOR RURAL PEOPLE OF INDIA. 3. THE SOCIETY WILL START INSTITUTIONS LIKE SCHOOLS, J UNIOR COLLEGES, DEGREE COLLEGES, P.G. COLLEGES, DIET INSTITUTIONS, COLLEGE OF EDUCATION, ENGINEERING PHARMACY, NURSING, MEDICAL AND PARAMEDI CAL COLLEGES AND OTHER SUCH INSTITUTIONS FOR BOTH MEN AND WOMEN. 4. TO HELP THE STUDENTS OF POOR PEOPLE OF WEAKER SECTI ONS TO ACQUIRE THE ACADEMIC AND TECHNICAL EDUCATION TO PARTICIPATE IN REBUTTING THE NATION. 5. TO GIVE PRIORITY TO THE SCHEDULED TRIBES AND SCHEDU LED CASTE MEN AND WOMEN TO GET WELL EDUCATED. 6. TO CONDUCT SEMINARS, SYMPOSIUMS, WORSHIPS AND INVIT ED EXPERTS FROM INDIA AND ABROAD TO IMPROVE THE QUALITY OF EDUCATION AND TO SUPPORT THE STUDENTS TO ELEVATE THEMSELVES TO THE INTERNATIONAL STANDARDS. ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 3 7. TO PROMOTE ADULT EDUCATION SCHOOLS FOR ERADICATION OF ILLITERACY TO THE POOR PEOPLE. 8. TO EDUCATE PEOPLE ABOUT GREEN REVALUATION, RESOLUTI ON IN A CLEAN AND GREEN ECOLOGY. 9. TO CO-OPERATE THE GOVERNMENT BY ADOPTING THEIR WELF ARE SCHEMES FOR UP LIFTING THE POOR IN THE SOCIETY. 10. TO PROMOTE THE HUMAN RIGHTS, HUMAN WELFARE AND FAMI LY PLANNING SCHEMES. 3. THE LD. COMMISSIONER DENIED THE CLAIM OF THE ASS ESSEE U/S 12A OF THE ACT BY OBSERVING AS FOLLOWS: FOR GRANTING REGISTRATION U/S 12AA OF THE I.T. ACT, THE OBJECTS OF THE SOCIETY AS WELL AS GENUINENESS OF THE ACTIVITIES HAVE TO BE CONSIDERED. THOUGH THE SOCIETYS KEY ACTIVITY IS RUNNING EDUCATIONAL INSTITUTIONS. IT COLLECTED FULL FEE FROM OTHER STUDENTS AS COMMERCIAL ACTIVITY. THE PRESIDENT ENJ OYS CERTAIN EXTRA-ORDINARY, PREROGATIVE & DISCRETIONARY POWERS TO GIVE FREE EDU CATION TO THE POOR & NEEDY STUDENTS. PAN OF THE SOCIETY IS NOT VALID BECAUSE THE SOCIETY WAS REGISTERED UNDER THE A.P. SOCIETIES REGISTRATION ACT, A.P. ACT NO.35 OF 2001, IN SOCIETY NO.9 OF 2004, ON 6.1.2004. THE SOCIETY DID NOT REGISTER ITSELF U /S 43(1) OF THE A.P. CHARITABLE AND HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 198 7. ALSO THE ASSESSEE IS FILING RETURNS OF INCOME IN THE STATUS OF SOCIETY. THE SO CIETY FAILED TO PRODUCE CONFIRMATORY LETTERS IN RESPECT OF ALL UNSECURED LO ANS TAKEN. THE SOCIETY FAILED TO FURNISH THE EVIDENCES IN RESPECT OF MANAGEMENT ADVA NCE AND TO EXPLAIN AS WHY THE UNSECURED LOANS WERE TRANSFERRED AS MANAGEMENT ADVA NCE. THE SOCIETY REPEATEDLY AMENDED ITS AMENDMENT CLAUSE & DISSOLUTION CLAUSE A ND NOT PROPERLY WORDED AND NOT ENDORSED BY THE REGISTRAR OF SOCIETIES. THE SO CIETY DID NOT PRODUCE RECEIPTS FOR CORPUS DONATION AS NO SUCH RECEIPTS WERE ISSUED TO THE ALLEGED DONORS. THE SOCIETY DID NOT REGISTER ITSELF WITH THE CHIEF COMMISSIONER OF INCOME-TAX U/S 10(23C) OF THE I.T. ACT EVEN THOUGH ITS RECEIPTS FOR THE FINANCIAL YEAR EXCEEDED RS.1 CRORE. AS SUCH THE GENUINENESS OF THE ACTIVITIES HAS NOT BEEN PROV ED. IN VIEW OF THE FOREGOING DISCUSSION, THE APPLICATION IN FORM NO.10A DATED NI L FILED BY THE SOCIETY ON 14.5.2013 FOR REGISTRATION U/S 12AA OF THE I.T. ACT IS NOT MAINTAINABLE AND IS HEREBY REJECTED. 4. ON BEING AGGRIEVED, ASSESSEE FILED AN APPEAL BEF ORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE SOCIETY IS COMMITTED FOR THE EDUCATION AND RUNNING VARIOUS INSTITUTIONS. THE COMMISSIONER WITHOUT CONSIDERING THE OBJECTS OF THE SOCIETY ON ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 4 FLIMSY GROUNDS, REJECTED THE REGISTRATION U/S 12A O F THE ACT TO THE ASSESSEE. HE FURTHER SUBMITTED THAT FEE COLLECTED FROM THE STUDENTS USED FOR CARRYING OUT THE OBJECTS OF THE SOCIETY. IN SO FAR AS OBJECTIONS RAISED BY THE COMMISSIONER IN RESPECT OF THE CORPUS DONATIONS, IT WAS SUBMITTED THAT THE PROMOTERS OF THE SOCIETY HAS ADV ANCED A SUM OF RS.33,50,000/- & RS.21,00,000/-. AS AND WHEN FUNDS ARE REQUIRED BY THE SOCIETY, THE PROMOTERS HAVE DONATED THESE FUNDS FOR CONSTRUCTION OF THE COLLEGE BUILDING. THESE DETAILS WERE CONSIDERE D BY THE A.O. RELATING TO THE ASSESSMENT YEAR 2011-12 U/S 143(3) OF THE AC T. THEREFORE, IT CANNOT BE A SUBJECT MATTER FOR THE LD. COMMISSIONER TO CONSIDER FOR GRANTING REGISTRATION U/S 12A OF THE ACT. HE FURTH ER SUBMITTED THAT FOR THE PURPOSE OF REGISTRATION U/S 12A OF THE ACT, THE RE IS NO REQUIREMENT FOR GETTING THE SOCIETY REGISTERED WITH CCIT U/S 10 (23C) OF THE ACT AND PRAYED FOR GRANT OF REGISTRATION U/S 12A OF THE ACT TO THE ASSESSEE SOCIETY. HE ALSO RELIED ON THE VARIOUS CASE LAWS A S FOLLOWS: 1. 327 ITR 73 (P&H) PINEGROVE INTERNATIONAL CHARITABLE TRUST & ORS. VS. UNION OF INDIA & ORS. 2. 353 ITR 32 (DEL) ST. LAWRENCE EDUCATIONAL SOCIETY ( REGD.) VS. CIT & ANR. 3. 327 ITR 121 (BOM) VANITA VISHRAM TRUST VS. CCIT & A NR. 4. 158 TAXMAN 146 (DEL) AMERICAN HOTEL & LODGING ASSOC IATION EDUCATIONAL INSTITUTE VS. CENTRAL BOARD OF DIRECT TAXES & ORS. 5. 194 TAXMAN 442 (P&H) KASHATRIYA SABHA MAHARANA PART AP BHAWAN VS. UNION OF INDIA & ANR. ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 5 6. 285 ITR 327 (KAR) SANJEEVAMMA HANUMANTHE GOWDA CHAR ITABLE TRUST VS. DIRECTOR OF INCOME TAX (EXEMPTION) 7. 185 ITR 634 (ALLBAD) [A] FIFTH GENERAL EDUCATION S OCIETY VS. CIT 8. 289 ITR 139 (GUJ) CIT VS. GUJARAT MARITIME BOARD 9. DECISION OF JURISDICTIONAL VIZAG BENCH IN THE CASE OF SRI RAJARAJESWARI CHARITABLE TRUST IN ITA NO.699/VIZAG/2013 DATED 2.7 .2014 10. ITA NOS.649 & 650/VIZAG/2013 DATED 7.3.2014 IN THE CASE OF SIVANANDA SUPATHA FOUNDATION, TADEPALLIGUDEM. 11. ITA NO.202/VIZAG/2012 IN THE CASE OF SRI SARASWATHI EDUCATIONAL SOCIETY, AMALAPURAM 12. ITA NO.369/VIZAG/2012 IN THE CASE OF R.K. EDUCATION AL SOCIETY, MACHILIPATNAM 13. 326 ITR 310 (MAD) CIT VS. R.M.S. TRUST 5. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE ASSESSEE HAS FAILED TO FILE DETAILS IN RESPECT OF THE UNSECU RED LOANS AND THEREFORE THE LD. COMMISSIONER DOUBTED THE GENUINENESS OF THE ASSESSEES SOCIETY TO GRANT REGISTRATION U/S 12A OF THE ACT AND SUBMIT TED THAT THE LD. COMMISSIONER RIGHTLY REJECTED REGISTRATION U/S 12A OF THE ACT. HE ALSO SUBMITTED THAT THE ASSESSEE IS NOT ABLE TO PLACE AN Y MATERIAL ON RECORD TO SUBSTANTIATE HIS CASE THAT ASSESSEE IS CARRYING CHARITABLE ACTIVITIES EXCEPT FREE EDUCATION TO THE 3 STUDENTS. HE ALSO P OINTED OUT THAT WHEN THE ASSESSEE STARTED FUNCTIONING IN THE YEAR 2004, WHY REGISTRATION IS REQUIRED U/S 12A FOR THE ASSESSMENT YEAR 2013-14. FROM THE ASSESSMENT ORDER HE HAS POINTED OUT THAT THE A.O. H AS OBSERVED THAT ASSESSEE IS RUNNING THE BUSINESS OF EDUCATION. THE REFORE, ASSESSEE IS NOT ENTITLED FOR THE REGISTRATION U/S 12A OF THE AC T. THE LD. D.R. TO SUPPORT HIS ARGUMENTS RELIED IN THE CASE OF CIT VS. QUEENS EDUCATIONAL SOCIETY & ST. PAULS SR. SECONDARY SCHOOL 319 ITR 16 0 (UTTARAKHAND). HE ALSO RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF VODITHALA ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 6 EDUCATION SOCIETY VS. ADIT (EXEMPTIONS) II, HYDERAB AD (2008) 20 SOT 353. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORDS , GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE I.E. SRINIVASA EDUCATIONAL SOCIETY EXISTED FOR THE PURPOSE OF IMPA RTING EDUCATION IN THE YEAR 2004 AND GET REGISTRATION UNDER A.P. STATE SOC IETIES REGISTRATION ACT ON 16.1.2004. THE SOCIETY HAS BEEN FILING ITS RETURN OF INCOME REGULARLY IN THE STATUS OF AOP TRUST. THE ASSESSEE SOCIETY APPLIED FOR REGISTRATION U/S 12AA OF THE ACT BY APPLICATION DAT ED 14.5.2013 BY FILING ALL THE DETAILS BEFORE THE CIT. 7. THE LD. CIT HAS REJECTED THE CLAIM OF THE ASSESS EE U/S 12AA OF THE ACT MAINLY FOR THE FOLLOWING REASONS: 7.1 THE ASSESSEE SOCIETY ACTIVITY IS RUNNING EDUCAT IONAL INSTITUTIONS COLLECTED FULL FEE FROM OTHER STUDENTS AS A COMMERC IAL ACTIVITY. THE PRESIDENT OF THE SOCIETY ENJOYS EXTRA ORDINARY POWE R PREROGATIVE AND DISCRETIONARY POWER TO GIVE FREE EDUCATION TO THE P OOR AND NEEDY STUDENTS. THE ASSESSEE SOCIETY FAILED TO PRODUCE C ONFIRMATION LETTERS IN RESPECT OF UNSECURED LOANS TAKEN. THE SOCIETY ALSO FAILED TO REGISTER ITSELF WITH THE CCIT U/S 10(23C) OF THE ACT. IT IS A FACT THAT THE ASSESSEE SOCIETY EXISTED FOR THE PURPOSE OF IMPARTING THE ED UCATION AND RUNNING VARIOUS EDUCATIONAL INSTITUTIONS SINCE 2004. THERE IS NOTHING ON THE RECORD THAT THE ASSESSEE SOCIETY IS COLLECTING MORE FEE THAN THE FEES PRESCRIBED BY THE CONCERNED AUTHORITIES. THEREFORE , IT IS DIFFICULT TO ACCEPT THE OBJECTION RAISED BY THE CIT THAT THE ASS ESSEE IS COLLECTING THE FEE FROM THE STUDENTS AMOUNTING TO COMMERCIAL ACTIV ITY. THE COMMISSIONER IN HIS ORDER HAS NOT SUBSTANTIATED WHA T IS THE BASIS FOR ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 7 HIM TO COME TO THE ABOVE CONCLUSION, THE ASSESSEE S OCIETY TO RUN THE EDUCATIONAL INSTITUTION LIKE ANY OTHER EDUCATIONAL INSTITUTION COLLECTING THE FEE FROM THE STUDENTS. THEREFORE, COLLECTING FEE F ROM THE STUDENTS NOT AMOUNTING TO COMMERCIAL ACTIVITY. 7.2 ANOTHER OBJECTION RAISED BY THE COMMISSIONER IN RESPECT OF UNSECURED LOANS IS CONCERNED, IT WAS SUBMITTED BY T HE LD. COUNSEL FOR THE ASSESSEE THAT THE PROMOTERS OF THE SOCIETY HAVE ADVANCED FUNDS OF RS.33.50 LAKHS AND RS.21 LAKHS AS AND WHEN FUNDS AR E REQUIRED BY THE SOCIETY. THE PROMOTERS HAVE DONATED THESE FUNDS FO R CONSTRUCTION OF THE COLLEGE BUILDING AND THESE AMOUNTS RECEIVED BY THE ASSESSEE SOCIETY RELATING TO ASSESSMENT YEAR 2011-12 THAT THE ASSESS MENT WAS ALREADY COMPLETED BY THE ASSESSING OFFICER U/S 143(3) OF TH E ACT. FROM THE ABOVE SUBMISSIONS OF THE ASSESSEE, WE FIND THAT TO RUN EDUCATIONAL INSTITUTION, IT IS NECESSARY TO HAVE A BUILDING AND FURNITURE. IF THE PROMOTERS OF THE ASSESSEE SOCIETY DONATED CERTAIN F UNDS RELATING TO ASSESSMENT YEAR 2011-12 IF AT ALL THE SOURCE IS REQ UIRED TO EXPLAIN, IT HAS TO BE EXAMINED BY THE ASSESSING OFFICER IN THAT REL EVANT ASSESSMENT YEAR ONCE THE ASSESSING OFFICER HAS CONSIDERED THE FUNDS DONATED BY THE PROMOTERS OF THE SOCIETY AND ASSESSMENT WAS COMPLET ED U/S 143(3) OF THE ACT, IN OUR OPINION IT IS NOT A SUBJECT MATTER FOR THE COMMISSIONER TO CALL THOSE DETAILS AND REJECTING CLAIM OF THE ASSES SEE U/S 12A OF THE ACT. WE FURTHER OBSERVED THAT WHEN THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION U/S 12A OF THE ACT, THE COMMISSIONER A T THIS TIME OF GRANTING REGISTRATION U/S 12A OF THE ACT, HE HAS TO SEE THAT WHETHER THE OBJECTIVE OF THE TRUST ARE CHARITABLE OR NOT AND GE NUINENESS OF THE ACTIVITIES CARRIED OUT BY THE ASSESSEE SOCIETY. IN THE PRESENT CASE, THE COMMISSIONER HAS NOT DOUBTED THE ACTIVITIES CARRIED BY THE SOCIETY. IN ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 8 FACT THE ASSESSEE SOCIETY RUNNING ONLY EDUCATIONAL INSTITUTIONS. IT IS NOT THE CASE OF THE COMMISSIONER THAT IN THE NAME OF TH E EDUCATION ASSESSEES SOCIETY IS DOING OTHER THAN THE EDUCATIO N. SO FAR AS ANOTHER OBJECTION RAISED BY THE COMMISSIONER WITH REGARD TO THAT THE SOCIETY DID NOT REGISTER WITH THE CHIEF COMMISSIONER OF INCOME- TAX U/S 10(23C) IS CONCERNED, IT IS NOT MANDATORY FOR THE ASSESSEE BEF ORE CLAIMING EXEMPTION U/S 12A OF THE ACT THAT THE ASSESSEE SHOU LD REGISTER WITH CHIEF COMMISSIONER OF INCOME-TAX U/S 10(23) OF THE ACT. IN VIEW OF THE ABOVE, WE FIND THAT COMMISSIONER WITHOUT CONSIDERIN G THE OBJECTS OF THE ASSESSEE SOCIETY AND SIMPLY REJECTED REGISTRATION U /S 12A OF THE ACT ON FLIMSY GROUNDS. SO FAR AS AMENDMENTS MADE BY THE A SSESSEE IN RESPECT OF MEMORANDUM OF ASSOCIATION. WE HAVE ALSO GONE TO THE RESOLUTION DATED 19.10.2013. THE ASSESSEE SOCIETY CALLED THE EXTRAORDINARY GENERAL BODY MEETING RECTIFIED CERTAIN MISTAKES. T HOSE RECTIFICATIONS ARE NOTHING TO DO WITH THE GRANT A REGISTRATION U/S 12A OF THE ACT. THE LD. D.R. HAS POINTED OUT THAT FROM THE ASSESSMENT ORDER , ASSESSEE IS RUNNING THE BUSINESS OF EDUCATION. THERE IS NOTHIN G ON THE RECORD TO SHOW THAT ASSESSEE IS RUNNING EDUCATION AS A BUSINE SS. THEREFORE, THIS ARGUMENT IS REJECTED. 7.3 ONE OF THE ANOTHER ARGUMENT RAISED BY THE LD. D .R. THAT ASSESSEE IS ONLY PROVIDING FREE EDUCATION TO 3 STUDENTS. IN THIS CONTEXT, WE OBSERVE THAT THE ASSESSEE SOCIETY COMMITTED FOR THE EDUCATION AND RUNNING THE EDUCATIONAL INSTITUTION AS PER THE OBJE CTS OF SOCIETY AND ALSO PROVIDED FREE EDUCATION TO 3 STUDENTS. THEREFORE, THE ASSESSEE IS CARRYING ITS ACTIVITIES AS PER THE OBJECTS OF THE S OCIETY IMPARTING THE EDUCATION, WHICH IS CHARITABLE IN NATURE AND IN OUR OPINION, THE ASSESSEE IS ENTITLED FOR REGISTRATION U/S 12A OF THE ACT. I N THIS CONTEXT, THE ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 9 COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SRI RAJA RAJESWARI CHARITABLE TRUST, CHINTALAPUDI, .W.G DIST VS. CIT RA JAHMUNDRY IN ITA NO.699/VIZAG/2013 DATED 2.7.14 HAS OBSERVED THAT IT IS WELL SETTLED PRINCIPLE THAT AT THE TIME OF GRANT OF REGISTRATION , THE CIT IS ONLY REQUIRED TO LOOK INTO THE OBJECTS OF THE TRUST AND GENUINENE SS OF ITS ACTIVITIES. 8. IN THE PRESENT CASE THE OBJECTS OF THE ASSESSEE SOCIETY TO RUN THE EDUCATIONAL INSTITUTIONS AND TO IMPART THE EDUCATIO N. SO FAR AS GENUINENESS IS CONCERNED, ASSESSEE ONLY RUNNING THE EDUCATIONAL INSTITUTIONS. THEREFORE, THE GENUINENESS CANNOT BE DOUBTED. IT IS NECESSARY TO CLARIFY THAT THE GENUINENESS IN RESPEC T OF THE ACTIVITIES CARRIED BY THE ASSESSEE HAS TO BE LOOKED INTO AT TH E TIME OF GRANTING REGISTRATION U/S 12A OF THE ACT. IN THE PRESENT CA SE THE COMMISSIONER HAS GONE BEYOND THE SCOPE OF THE ACT AND REJECTED T HE CLAIM OF THE SOCIETY ON THE GROUND THAT UNSECURED LOANS GIVEN BY THE PROMOTERS RELATING TO ASSESSMENT YEAR 2011-12 NOT EXPLAINED P ROPERLY. IN THE CASE OF R.K. EDUCATIONAL SOCIETY, MACHILIPATNAM VS. CIT, VIJAYAWADA IN ITA NO.369/VIZAG/2012 DATED 4.3.15 OF VISAKHAPATNAM BEN CH HAS CONSIDERED THE SIMILAR ISSUE AND HAS OBSERVED THAT THE REGISTRATION U/S 12AA OF THE ACT CANNOT BE DENIED TO THE EDUCATIONAL INSTITUTIONS BECAUSE IT IS OTHERWISE ELIGIBLE FOR EXEMPTION U/S 10(23C) OF THE ACT. FURTHERMORE, THE ITAT HYDERABAD BENCH HAS CONSISTEN TLY EXPRESSED THE VIEW THAT AN EDUCATIONAL INSTITUTION CAN AVAIL EXEM PTION EITHER U/S 10(23C) OR 11 OF THE ACT IF THE CONDITIONS IMPOSED UNDER THOSE PROVISIONS ARE SATISFIED. MOREOVER, THE TIME OF GR ANTING REGISTRATION U/S 12AA OF THE ACT, THE CIT(A) HAS TO LOOK INTO THE OB JECTS OF THE SOCIETY AND GENUINENESS OF THE ACTIVITIES. AS CAN BE SEEN, THERE CANNOT BE ANY DOUBT THAT ONE OF THE OBJECTS OF THE SOCIETY IS TO IMPART ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 10 THE EDUCATION AND FOR ACHIEVING THAT OBJECT ASSESSE E HAS ESTABLISHED AN EDUCATIONAL INSTITUTION AND IMPARTING THE EDUCATION . THEREFORE, THERE CANNOT BE ANY DOUBT WITH REGARD TO CHARITABLE OBJEC T OF THE SOCIETY. SO FAR AS THE GENUINENESS OF ITS ACTIVITIES ARE CONCER NED, THE CIT(A) HAS NOT BROUGHT ANY SPECIFIC INSTANCE WHICH COULD PROVE THA T THE ACTIVITIES OF THE SOCIETY ARE NOT GENUINE. SO FAR AS APPLICATION FOR REGISTRATION U/S 12A OF OF THE ACT BY THE ASSESSEE DATED 14.6.2013 IS CONCE RNED, IT IS OPEN TO THE ASSESSEE TO MAKE AN APPLICATION AS PER LAW. TH ERE IS NO TIME FRAME FIXED BY THE ACT THAT THE ASSESSEE SOCIETY HAS TO M AKE AN APPLICATION IMMEDIATELY WHEN THE SOCIETY IS CONSTITUTED. THE C OMMISSIONER HAS TO EXAMINE THE OBJECTS OF THE SOCIETY AND GENUINENESS AND ACCORDINGLY REGISTRATION U/S 12AA OF THE ACT HAS TO BE GRANTED. THEREFORE, ONCE THE CONDITIONS OF SECTION 12A OF THE ACT ARE SATISFIED, THE CIT(A) CANNOT DENY THE REGISTRATION ON EXTRANEOUS CONDITIONS. 9. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RM S TRUST 326 ITR 310, THE HONBLE MADRAS HIGH COURT HAS OBSERVED THA T AT THIS STAGE OF THE CONSIDERING THE APPLICATION FOR REGISTRATION U/ S 12A OF THE ACT, ONLY ENQUIRY WHICH WOULD POSSIBLY BE MADE WOULD BE WHETH ER THE APPLICANT TRUST HAS MADE AN APPLICATION, WHETHER THE ACCOUNTS ARE MAINTAINED IN THE MANNER AS SUGGESTED IN THE SAID SECTION, THE CI T(A) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION FOR REGISTRA TION FOR WANT OF AMENDMENT OF TRUST DEED SINCE IT IS NOT A PRE REQUI SITE CONDITION FOR REGISTERING THE APPLICANT AS A TRUST. 10. IN THE CASE OF CIT VS. SURYA EDUCATIONAL & CHAR ITABLE TRUST 355 ITR 280 (P&H). AT THIS STAGE OF GRANTING REGISTRAT ION U/S 12A OF THE ACT TO A CHARITABLE TRUST IN ACCORDANCE WITH PROCEDURE LAID DOWN U/S 12AA OF ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 11 THE ACT, THE CIT ONLY TO EXAMINE THE GENUINENESS OF THE OBJECTS AND NOT THE APPLICATION OF INCOME FOR CHARITABLE PURPOSES, WHICH CAN BE EXAMINED WHEN THE TRUST FILES ITS RETURNS. WE THERE FORE KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO FOLLOWING JUDICIAL PRECEDENTS, WE ARE OF THE OPINION THAT THE ORDER PA SSED BY THE COMMISSIONER REJECTING THE REGISTRATION U/S 12A OF THE ACT DESERVE TO BE QUASHED. ACCORDINGLY, WE QUASH THE ORDER PASSED BY THE COMMISSIONER AND DIRECTED TO THE COMMISSIONER TO GRANT REGISTRAT ION U/S 12A OF THE ACT. 11. SO FAR AS CASE LAWS RELIED BY THE LD. D.R. ARE CONCERNED, IN CASE OF QUEENS EDUCATIONAL SOCIETY (SUPRA), THE HONBLE UT TARAKHAND HIGH COURT HAS OBSERVED THAT THE ASSESSEE SOCIETY HAD BE EN CONSTRUCTING AND PURCHASING BUILDINGS OUT OF THE INCOME EARNED BY IM PARTING EDUCATION WITH A VIEW TO EXPAND THE INSTITUTION TO EARN MORE INCOME. THE ASSESSEE IS NOT ENTITLED TO CLAIM EXEMPTION. IN TH E PRESENT CASE, THE ASSESSEE SOCIETY IS RUNNING INTO LOSSES AND THERE I S NOTHING ON THE RECORD THAT ASSESSEE SOCIETY IS CARRYING COMMERCIAL ACTIVITY FOR THE PURPOSE OF MAKING PROFITS. THEREFORE, THE ABOVE CA SE LAW IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 12. IN SO FAR AS ANOTHER CASE RELIED BY THE LD. D.R . IN THE CASE OF VODITHALA EDUCATION SOCIETY VS. ADIT (SUPRA), THE I SSUE IN RESPECT OF COLLECTION OF CAPITATION FEE AND COLLECTING THE FEE OVER AND ABOVE THE COMMITTEE WHICH IS CONSTITUTED BY THE STATE GOVERNM ENT. THE FACTS IN THE ABOVE CASE LAWS ENTIRE DIFFERENT FROM THE PRESE NT CASE. THEREFORE, THE CASE LAWS RELIED BY THE LD. D.R. HAS NO APPLICA TION TO THE FACTS OF THE CASE. ITA NO.67/VIZAG/2014 SRINIVASA EDUCATIONAL SOCIETY, RAJAHMUNDRY 12 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 30.09.2015 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT SRINIVASA EDUCATIONAL SOCIETY, D.NO.20-1-27, RAMACHANDRARAOPETA, RAJAHMUNDRY-533 103. 2. -., / THE RESPONDENT THE CIT, RAJAHMUNDRY 3. ; () / THE CIT(A), RAJAHMUNDRY 4. -, , / // / DR, ITAT, VISAKHAPATNAM 5 . .. . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM