Merely other objects as required by Registrar of Societies not disqualify approval u/s 10(23C)(vi)

Merely printing other aims/objects as per requirement of Registrar of Societies would not disqualify it for approval u/s 10(23C)(vi) – ITAT

ABCAUS Case Law Citation:
ABCAUS 2928 (2019) (05) ITAT

Important Case Laws Cited/relied upon by the parties
Harf Charitable Trust (Regd.) Malerkotla vs. Chief Commissioner of Income Tax And Another [2015] 376 ITR 110 (P&H).

The appellant assessee was a registered charitable society. It filed an application in prescribed Form requesting for grant of exemption/approval under Section 10(23C)(vi) of the Income Tax Act, 1961 (the Act).

The CCIT called for the details of the assessee. On going through the aims and objects of the society, the CCIT found that assessee was involved in promoting the education and for other objects as well. The found that out of the objects listed in the memorandum only the aims and objects at two Serial Nos. cater the purpose of education and rest others were different purposes than education which were not charitable in nature and indicated other motives of the assessee society.

The CCIT, therefore, concluded that assessee society was not solely operating for educational purposes. The explanation of assessee was called for.

The assessee filed the submissions giving undertaking therein that assessee doing only educational work. However, aims and objects of the society were the documents which State Government and Department of Registrar of Firms and Society provide for compulsory printing and assessee do the same.

It was stated that the assessee society was doing only educational work i.e., running school and college only, which was fully verifiable from the regular books of account and audited statements of accounts. It was stated that not even a single work other than education was ever done by the assessee society. The assessee even gave an undertaking to amend the bye laws of the society, but, the same was not accepted.

The application was accordingly rejected.

The Tribunal observed that it was not in dispute that the aims and objects of the assessee were to promote education and assessee in pursuance of aims and objects only carried out the educational activities.

The Tribunal noted that there was nothing on record to show if the assessee was doing any other activity in pursuance to aims and objects of assessee society. Therefore, the CBDT Circular No. 14 of 2015, Dated 17.08.2015 directing that while granting registration / approval under section 10(23C)(vi) of the Act, the Prescribed Authority has to ensure that educational institution must exist “solely for educational purposes and not for the purpose of profit.” would not support the case of the Revenue.

The Tribunal opined that since the assessee did not do any other activity, therefore, merely mentioning some other aims and objects would not disentitle the assessee for claiming exemption/approval under section 10(223)(vi) of the Act.  Merely because the assessee printed certain aims and objects as per the requirement of Registrar of Societies would not make out a case for rejection of the application of assessee for approval under the said provision

Accordingly, the Tribunal set aside the order of the CCIT and directed him to grant approval/exemption to the assessee as per Law.

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