Charitable Nature of Society’s Activities can’t be suspected as the same was within its objects as given in the Bye-Laws: ITAT [Read Order]

Income Tax Appellate Tribunal, Lucknow bench recently held that the charitable nature of the activities of a society cannot be suspected as the same was within its objects as given in the bye-laws.

In the instant case,the assessee, a non-profit charitable society registered under the Societies Registration Act, 1860 had applied for a registration under section 12AA of the Income Tax Act which the CIT (Exemptions) has refused. Assessee contended that on account of granting registration CIT (E) is expected to examine is object of the assessee and genuineness of the activities of the assessee for achieving of these objects.

However, the lower authority holds that mere recital of objects or activities without cogent or corroborative evidence are not sufficient by themselves to enable a registering authority to grant registration.

Aditya Agarwal, C.A. submitted that assessee had filed copies of audited financial statements, income tax return for the financial year 2014-15 and 2015-16 which itself proves that the assessee was running a college which was in consonance with the objects of the society.

The tribunal bench comprising Partha Sarathi Chaudhury, Judicial member and T. S. Kapoor, Accountant member heard the rival submission and perused the documents on record and observed the fact of case that object of the society laid down in the byelaws are charitable in nature and CIT (E) also not doubted regarding the same, but the said findings with respect to genuineness of the activities could not be verified is not based upon the facts.

The tribunal bench endorsed the decision of Allahabad High Court in the case of CIT vs. Red Rose School, wherein held that CIT (Exemptions) has to satisfy himself about the genuineness of the activities of the trust and also the objects of the trust or institution.

While pressing the aforementioned decision, the bench held that the objects of the assessee undoubtedly are charitable in nature as given in the bye-laws. Therefore, the registration cannot be denied by holding that the activities of the assessee were not genuine.