M/s. Ganeshee Lal Education Society, Haryana v. ACIT, Rewari

ITA 4694/DEL/2011 | misc
Pronouncement Date: 24-02-2012 | Result: Allowed

Appeal Details

RSA Number 469420114 RSA 2011
Assessee PAN AAAAG4039N
Bench Delhi
Appeal Number ITA 4694/DEL/2011
Duration Of Justice 3 month(s) 28 day(s)
Appellant M/s. Ganeshee Lal Education Society, Haryana
Respondent ACIT, Rewari
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 24-02-2012
Date Of Final Hearing 16-02-2012
Next Hearing Date 16-02-2012
Assessment Year misc
Appeal Filed On 27-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENC H BEFORE SHRI R.P. TOLANI JM & SHRI A.N. PAHUJA AM ITA NO.4694/DEL/2011 ASSESSMENT YEAR:2011-12 M/S GANESHEE LAL EDUCATION SOCIETY GL PUBLIC SCHOOL KOSLI ROAD KANINA DISTRICT :MAHENDERGARH V/ S . COMMISSIONER OF INCOME-TAX ROHTAK [PAN : AAAAG 4039 N] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI RAJESH GOEL AR. REVENUE BY MS.RENUKA JAIN GUPTA DR DATE OF HEARING 16-02-2012 DATE OF PRONOUNCEMENT 24-02-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 27 TH OCTOBER 2011 BY THE ASSESSEE AGAINST AN ORDER DATED 23RD SEPTEMBER 2011 OF THE LD. CIT- ROHTAK RAISES THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT HAS GRAVELY ERRED IN LAW AND ON FACTS I N REJECTING THE APPELLANTS APPLICATION U/S 12A(1) WI THOUT APPRECIATING THE FACT THAT THE APPELLANT SOCIETY WA S GRANTED EXEMPTION FROM INCOME-TAX RIGHT FROM THE YEAR 2003-04 ON THE BASIS OF THE CONSTITUTION OF TH E SOCIETY AFTER CONSIDERING THE AIMS AND OBJECTS OF T HE SOCIETY. THE ORDER IS BASED ON SURMISES AND CONJECTURES. THE ORDER IS AGAINST LAW AND FACTS AN D THE REGISTRATION SOUGHT FOR MAY KINDLY BE DIRECTED TO BE ALLOWED. 2. THAT NO VALID OR REASONABLE OR EVEN LEGAL GROUND HAS BEEN CITED IN THE ORDER OF THE LEARNED CIT AND THE FACTS OF THE CASE FULLY PROVED THE EXISTENCE OF AND EDUCATIONAL SOCIETY DEVOTED EXCLUSIVELY TO EDUCATIO NAL CHARITABLE PURPOSES. THE REGISTRATION SOUGHT FOR WA S ITA NO.4694/DEL./2011 2 WHOLLY VALID IN LAW AND ON FACTS AND OUGHT TO HAVE BEEN ALLOWED. 3. THAT THE LEARNED CIT WAS NOT JUSTIFIED IN HOLDIN G THE SOCIETY AS A PRIVATE DISCRETIONARY SOCIETY ON ARBIT RARY GROUNDS. THE SOCIETY WAS EXCLUSIVELY A CHARITABLE INSTITUTION DEVOTED ONLY TO EDUCATIONAL PURPOSES AN D NONE ELSE THROUGHOUT ITS EXISTENCE SINCE THE YEAR 2003 AND WAS BEING TREATED BY THE DEPARTMENT AS SUCH AND GRANTED EXEMPTION FROM INCOME-TAX. THE REGISTRATION SOUGHT FOR WAS QUITE LEGAL AND VALID A ND JUSTIFIED AND MAY KINDLY BE DIRECTED TO BE GRANTED REGISTRATION. 2. FACTS IN BRIEF AS PER RELEVANT ORDERS ARE TH AT THE AFORESAID SOCIETY FILED AN APPLICATION IN FORM NO.10A ON 15.03.2011 U /S 12A(1)(AA) OF THE INCOME- TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT ) ALONG WITH A COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION AS ALSO INCO ME AND EXPENDITURE ACCOUNT AND BALANCE SHEET FOR THE FINANCIAL YEARS 2 007-08 TO 2009-10. AFTER HAVING A REPORT FROM THE CONCERNED ASSESSING OFFICE R[AO IN SHORT] WHEREIN IT WAS MENTIONED INTER ALIA THAT THE BOOKS OF ACCOUN TS OF THE AFORESAID SOCIETY WERE NOT PRODUCED BEFORE HIM THE LD. CIT ALLOWED A N OPPORTUNITY TO THE ASSESSEE SOCIETY. AFTER HAVING A FURTHER REPORT D ATED 6.9.2011 FROM THE CONCERNED AO THE LEARNED CIT CONCLUDED AS UNDER:- 3. ON 06.09.2011 BOOKS OF ACCOUNTS AND VOUCHERS P RODUCED AND TEST CHECKED. TWO CASH RECEIPTS IN TOKEN OF C ASH PAYMENTS MADE TO ONE SHRI KARTAR SINGH S/O SHRI MANGTU RAM ( LABOUR CONTRACTOR) RESIDENT OF VILLAGE DHANAUNDA DISTRICT MAHENDERGARH ON ACCOUNT OF LABOUR FOR BUILDING CONSTRUCTION WERE PERUSED AND PHOTOCOPIES OF WHICH WERE TAKEN AND PLACED ON RECOR D. AS PER THESE RECEIPTS ` ` `1 70 000/- AND ` ` 1 00 000/- HAVE BEEN SHOWN TO BE PAID IN CASH ON 07.04.2008 TO SH. KARTAR SINGH LABOUR CONTRACTOR. THESE PAYMENTS HAVE NOT TAKEN PLACE IN THE REGULAR BOOKS OF ACCOUNTS OF THE APPLICANT SOCIETY AT APPRO PRIATE PLACE. NO AGREEMENT WHATSOEVER WAS PRODUCED SHOWING ANY CON TRACT BETWEEN THE LABOUR CONTRACTOR AND THE APPLICANT SOC IETY. AN AMOUNT OF ` ``2 70 000/- WAS PAID IN CASH ON A SINGLE DAY INSTE AD OF MAKING THE PAYMENT THROUGH CROSSED CHEQUES OR DEMAN D DRAFT. ITA NO.4694/DEL./2011 3 MOREOVER INCOME TAX PROVISIONS IN RESPECT OF TDS U/S 194C ON CONTRACTUAL PAYMENTS HAVE ALSO NOT BEEN COM PLIED WITH BY THE APPLICANT SOCIETY. FROM THE FOREGOING IT IS C RYSTAL CLEAR THAT THE FINANCIAL AFFAIRS OF THE APPLICANT SOCIETY ARE NOT FAIR AND GENUINE AND NOT PROPERLY RECORDED IN THE BOOKS OF ACCOUNTS. IN THESE CIRCUMSTANCES IT CANNOT AUTHENTICALLY BE SAID THAT THE RECEIPTS OF THE APPLICANT SOCIETY ARE UTILIZED PROPERLY TO ATTA IN ITS CHARITABLE AIMS AND OBJECTS. THEREFORE THE APPLICATION OF TH E APPLICANT SOCIETY FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT 1961 DESERVES TO BE REJECTED. 4. AS PER RULE 17A (A) OF INCOME-TAX RULES 1962 T HE APPLICANT WAS REQUIRED TO SUBMIT THE ORIGINAL INSTRUMENT OF I TS ESTABLISHMENT TOGETHER WITH A COPY THEREOF BUT THE APPLICANT SUB MITTED ONLY A PHOTOCOPY OF THE INSTRUMENT. THE APPLICANT DID NOT TURN UP TO PRODUCE THE ORIGINAL COPY OF THE INSTRUMENT OF ITS ESTABLISHMENT IN SPITE OF COMMUNICATION FROM THIS OFFICE AS WELL AS FROM THE OFFICE OF THE ACIT/JOINT CIT CONCERNED. THE APPLICATION WAS THEREFORE INCOMPLETE AND NOT COMPETENT FOR THE CONSIDERATION OF REGISTRATION U/S 12AA OF INCOME-TAX ACT 1961. 5. THE APPLICANT SOCIETY IS JUST LIKE A PRIVATE DIS CRETIONARY SOCIETY CONTROLLED BY THE OFFICE BEARERS OF THE SOC IETY HAVING 5 MEMBERS OUT OF WHICH THREE MEMBERS ARE FROM THE SAM E FAMILY WHO ARE SELF (SH. RAJENDER SINGH) HIS WIFE (SMT. D HANVANTI) AND HIS SON (SH. HOSHIYAR SINGH). THIS WAY THE MAJORIT Y OF OFFICE BEARERS HAVE CLOSE FAMILY RELATIONS WITH EACH OTHER . COMPLETE AND UPDATED LIST OF MEMBERS AS WELL AS OF OFFICE BEARER S WERE FURNISHED. IN THE MEMORANDUM OF APPLICANT SOCIETY THERE DOES N OT CONTAIN ANY INTERNAL CHECK ON THE AUTOCRATIC FUNCTIONING OF THE OFFICE BEARERS WHO ARE ALL-POWERFUL CREATING AN IMPRESSION OF ONE FAMILY SHOW IN THE SOCIETY. KEEPING IN VIEW THE FACTS AND CIRCUMS TANCES OF THE CASE THIS FACT IS ABUNDANTLY CLEAR THAT MOST OF TH E MEMBERS OF THE SOCIETY BELONG TO SAME FAMILY THEREBY CLOSELY REL ATED TO EACH OTHER. ALL THE PROPERTIES OF THE SOCIETY AS WELL A S ABSOLUTE FINANCIAL CONTROL STILL REMAINS IN THE HANDS OF THE THREE MEM BERS AND ALSO THE CRUCIAL POWERS TO TRANSFER THE ASSETS OF THE SOCIET Y TO ANY OR MANY MEMBERS OF THE OFFICE BEARERS THEREBY CLEARLY ALL OWS THE MEMBERS TO GET THE PROPERTY OF THE SOCIETY IN QUESTION TRAN SFERRED IN THEIR NAMES. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANC ES NEITHER AIMS/OBJECTS AND TERMS OF MEMORANDUM ARE OF CHARITABLE NATURE NOR ARE THERE ANY ACTIVITIES WHICH MAY BE P UT TO A TEST OF GENUINENESS. CONSEQUENTLY THE REQUEST OF THE APPL ICANT SOCIETY FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT CAN NOT BE ACCEDED ITA NO.4694/DEL./2011 4 TO AND THE APPLICATION IN FORM 10A IS THEREFORE R EJECTED ACCORDINGLY U/S 12AA(1)(B)(II) OF THE INCOME-TAX ACT 1961. 3. THE SOCIETY IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT ROHTAK. THE LD. AR ON BEHA LF OF THE ASSESSEE SUBMITTED THAT THE SOCIETY WAS ESTABLISHED ON 12 TH JUNE 2003 WITH THE OBJECTS OF RUNNING A SCHOOL AND THE INCOME RETURNED BY THE ASSESSEE IS E XEMPT U/S 10(23C)(IIIAD) OF THE ACT THE RECEIPTS BEING BELOW OF ` ``1 CRORE. SINCE RECEIPTS OF THE SOCIETY WERE LIKELY TO EXCEED ` `1 CRORE THE SOCIETY MOVED AN APPLICATION FOR REGI STRATION U/S 12A OF THE ACT. WHILE CARRYING US THROUGH THE IMPU GNED ORDER THE LD. AR CONTENDED THAT EVEN THOUGH THE ASSESSEE SOUGHT TO P RODUCE ORIGINAL INSTRUMENT OF ITS ESTABLISHMENT THE LD. CIT DID NOT EXAMINE T HE SAME AND DENIED REGISTRATION ON THE GROUND THAT THE SOCIETY WAS LIKE A PRIVATE D ISCRETIONARY SOCIETY CONTROLLED BY THE FAMILY OF SHRI RAJINDER SINGH. THE LD. CIT WAS NOT JUSTIFIED IN DENYING REGISTRATION ON THE GROUND THAT TDS WAS NOT DEDUCTE D FROM CERTAIN PAYMENTS PARTICULARLY WHEN THE SOCIETY WAS RUNNING A SCHOOL AND ITS AIMS & OBJECTS WERE CHARITABLE IN NATURE. ON THE OTHER HAND THE LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. WE FIND THAT THE SOCIETY WAS ESTABLISHED ON 12 TH JUNE 2003 WITH THE FOLLOWING AIMS AND OBJECTS:- A) TO ESTABLISH EDUCATIONAL INSTITUTION AND TO RUN A SCHOOL FOR THE ATTAINMENT OF THE MEANINGFUL AND QUALITY EDUCATION. B) TO DEVELOP THE SENSE OF PATRIOTISM TOWARDS NATIO N AND IMPART EDUCATION BY MODERN SCIENTIFIC METHOD AS WELL AS ANCIENT INDIAN CULTURE WITH DEVOTION TO HUMANITY AND GOD. C) TO HIRE OR TAKE ON LEASE THE NECESSARY BUILDING FOR INSTITUTION OR SCHOOL RUN BY THE SOCIETY AND CONSTR UCT ITS OWN IN THE LONG RUN AS AND WHEN THE SOCIETY IS ABLE TO CONSTRUCT. D) TO ARRANGE COMPETITIONS DEBATES OR QUIZ AND SEMINARS FOR THE ADVANCEMENT OF INTELLECTUALS. ITA NO.4694/DEL./2011 5 E) TO EDUCATION THE STUDENTS IN YOGA SPORTS AND PHYSICAL ACTIVITIES AND TO CONDUCT EXHIBITION FOR T HE PRACTICAL EDUCATION. F) TO CO-OPERATE WITH OTHER INSTITUTIONS HAVING SIM ILAR AIMS AND OBJECTS AND TO GET THEIR CO-OPERATION ALSO . G) TO SETUP WELL EQUIPPED LIBRARY AND READING ROOM WITH ALL AMENITIES AND TO PUBLISH MAGAZINES PERIODICALS AND JOURNALS FOR THE ADVANCEMENT OF GENERAL KNOWLEDGE. H) TO MAKE ARRANGEMENT FOR FREE SCHOLARSHIP AND STIPENDS AND FREE AID TO BRILLIANT AND DESERVING STUDENTS REGARDLESS OF THEIR CASTE AND CREED AND ISSUE APPEAL FOR DONATION AID AND GIFT FOR THE ADVANCEMENT OF SOCIETY. I) TO PURCHASE OR TAKE ON LEASE ANY PROPERTY CONVEN IENT FOR THE FURTHERANCE OF THE OBJECTS. J) TO CONSTRUCT MAINTAIN ALTER IMPROVE OR DEVELOP ANY BUILDING WHICH IS CONVENIENT FOR THE SOCIETY. K) TO DO ALL SUCH THINGS AND TO PERFORM ALL SUCH AC TIVITIES WHICH ARE NECESSARY FOR THE ACHIEVEMENT OF OBJECT O F SOCIETY. L) TO MORTGAGE LEASE OF MOVEABLE OR IMMOVABLE PROPERTY OR ANY PORTION THERE FOR IF IT IS NECESSAR Y FOR THE BETTERMENT OF SOCIETY. M) TO WORK HARD OF ACHIEVEMENT OF HIGHER GOALS AND OBJECTS OF SOCIETY. N) TO TAKE LOANS IN CASH OR KIND EITHER FROM INDIVI DUALS BANKS SOCIETIES GOVT. OR SEMI GOVT. BODIES FOR THE ADVANCEMENT OF THE PURPOSE OF SOCIETY. O) TO RECEIVE THE FINANCIAL AID FROM GOVT. OR SEMI GOVT. BODIES OR INDIVIDUAL. P) THE MANAGEMENT OF THE AFFAIRS OF THE SOCIETY WIL L BE ENTRUSTED IN ACCORDANCE WITH THE RULES AND REGULATI ONS OF THE SOCIETY. Q) THE PRESENT SIGNATORIES OF THE MEMORANDUM ARE TH E FOUNDER MEMBERS OF THE SOCIETY AND ELECTION WILL BE HELD ACCORDING TO RULES. 4.1 IT IS FURTHER MENTIONED IN THE DEED THAT T HE INCOME AND PROPERTY OF THE SOCIETY SHALL BE APPLIED SOLELY TOWARDS THE PROMOTI ON OF THE OBJECTS OF THE SOCIETY AS SET FORTH IN THE MEMORANDUM OF ASSOCIATION AND NO PORTION THEREOF SHALL BE PAID OR TRANSFERRED DIRECTLY OR INDIRECTLY TO THE M EMBERS OF SOCIETY. MOREOVER ON THE WINDING UP OR DISSOLUTION OF THE SOCIETY IF T HERE REMAINS AFTER SATISFACTION OF ALL ITS DEBTS AND LIABILITIES ANY PROPERTY WHATSOEV ER THE SAME SHALL NOT BE PAID TO ITA NO.4694/DEL./2011 6 OR DISTRIBUTED AMONG THE MEMBERS OF THE SOCIETY BUT SHALL BE GIVEN OR TRANSFERRED TO SOME OTHER INSTITUTION HAVING OBJECTS SIMILAR TO THE OBJECTS OF THE SOCIETY AND TO BE DETERMINED BY THE MEMBERS OF THE SOCIETY AT OR B EFORE THE TIME OF DISSOLUTION. 4.2 BEFORE PROCEEDING FURTHER WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF SEC. 12A & 12AA OF THE ACT WHICH READ AS UNDER: 12A. CONDITIONS FOR APPLICABILITY OF SECTIONS 11 AND 12 . (1) THE PROVISIONS OF SECTION 11 AND SECTION 12 SHA LL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS TH E FOLLOWING CONDITIONS ARE FULFILLED NAMELY:- (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRE SCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE TH E 1ST DAY OF JULY 1973 OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHM ENT OF THE INSTITUTION WHICHEVER IS LATER AND SUCH TRUST OR I NSTITUTION IS REGISTERED UNDER SECTION 12AA: PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF TH E PERIOD AFORESAID THE PROVISIONS OF SECTIONS 11 AND 12 SHA LL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION - (I) FROM THE DATE OF THE CREATION OF THE TRUST OR T HE ESTABLISHMENT OF THE INSTITUTION IF THE COMMISSIONE R IS FOR REASONS TO BE RECORDED IN WRITING SATISFIED TH AT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PER IOD AFORESAID FOR SUFFICIENT REASONS; (II) FROM THE 1ST DAY OF THE FINANCIAL YEAR IN WHIC H THE APPLICATION IS MADE IF THE COMMISSIONER IS NOT SO SATISFIED: PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFTER THE 1S T DAY OF JUNE 2007; (AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE A N APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION ON OR AFTE R THE 1ST DAY OF JUNE ITA NO.4694/DEL./2011 7 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMI SSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTI ON 12AA; (B) WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUT ION AS COMPUTED UNDER THIS ACT WITHOUT GIVING EFFECT TO THE PROVISI ONS OF SECTION 11 AND SECTION 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX IN ANY PREVIOUS YEAR THE ACCOUNTS OF THE TRUST OR INSTITUTION FOR THAT YEAR HAVE BEEN AUDITE D BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288 AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES A LONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR T HE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND V ERIFIED BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MA Y BE PRESCRIBED. (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1ST DAY OF JUNE 2007 THE PROVISIONS OF SECTIONS 11 AND 12 SHALL AP PLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESS MENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICAT ION IS MADE. 12AA. PROCEDURE FOR REGISTRATION (1) THE COMMISSIONER ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SECTION (1) OF SECTION 12A SHALL-- (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO SUCH INQUIRIES AS HE MAKE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES HE-- (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL IF HE IS NOT SO SATISFIED PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTI ON AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT: PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. ITA NO.4694/DEL./2011 8 (1A) ALL APPLICATIONS PENDING BEFORE THE CHIEF COM MISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE 1999 SHALL STAND TRANS FERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PR OCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE S TAGE AT WHICH THEY WERE ON THAT DAY. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12A. (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTE D REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) AND SUBSEQUENTL Y THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SU CH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION AS THE CASE MAY BE HE SHALL PASS AN ORDER IN WRITING CANCELLIN G THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GI VEN A REASONABLE OPPORTUNITY OF BEING HEARD. 5. A MERE GLANCE AT THE AFORESAID PROVISIONS R EVEALS THAT BEFORE CONSIDERING REGISTERATION IN TERMS OF THE AFORESAID PROVISIONS THE LD. CIT HAS TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTI ON AND THE GENUINENESS OF ITS ACTIVITIES AFTER MAKING SUCH INQUIRIES AS HE MAKE MAY DEEM NECESSARY IN THIS BEHALF. IN THE INSTANT CASE INDISPUTABLY THE SOCIE TY IS RUNNING A SCHOOL SINCE 2003 AND HAS BEEN CONTINUOUSLY ALLOWED EXEMPTION U/ S 10(23C)(IIIAD) OF THE ACT. IGNORING THESE ASPECTS THE LD. CIT IN THE IMPUGNED ORDER REJECTED THE REQUEST FOR REGISTRATION WHILE OBSERVING THAT THE SOCIETY DID NOT PLACE BEFORE HIM OR THE ADDL. CIT ORIGINAL INSTRUMENT OF ITS ESTABLISHMENT AND T HAT IT WAS CONTROLLED BY FAMILY MEMBERS OF SHRI RAJINDER SINGH WHILE CASH PAYMENTS HAD BEEN MADE WITHOUT DEDUCTION OF TDS. THEREAFTER THE LD. CIT CONCLUDED THAT NEITHER AIMS/OBJECTS AND TERMS OF MEMORANDUM ARE OF THE CHARITABLE NATUR E NOR ARE THERE ANY ACTIVITIES WHICH MAY BE PUT TO A TEST OF GENUINENES S. THE LD. CIT DID NOT ELABORATE IN HIS ORDER U/S 12AA(1)(B)(II) OF THE ACT AS TO WHICH SPECIFIC AIM/OBJECT OR ACTIVITY WAS NOT OF CHARITABLE NATURE . THE LD AR NOW CONTENDS ITA NO.4694/DEL./2011 9 BEFORE US THAT THE SOCIETY IS RUNNING A SCHOOL SINC E INCEPTION AND ITS CLAIM FOR EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT HAS BEEN AC CEPTED BY THE AO. AS ALREADY OBSERVED THE LD. CIT DID NOT EXAMINE THIS ASPECT O F THE ACTIVITIES NOR ELABORATED AS TO WHICH SPECIFIC CLAUSE IN THE MEMORANDUM OF TH E SOCIETY IS NOT OF CHARITABLE NATURE . MERELY BECAUSE WIFE AND SON OF SHRI RAJI NDER SINGH ARE ALSO MEMBERS OF THE SOCIETY OR TAX HAS NOT BEEN DEDUCTED AT SOUR CE FROM CERTAIN PAYMENTS DOES NOT IPSO FACTO MEAN THAT OBJECTS OR ACTIVITIES OF RUNNING THE SCHOOL ARE NOT GENUINE OR ARE NOT OF CHARITABLE NATURE. THE LD. CI T HAS ALL THE POWERS UNDER THE ACT TO ENQUIRE IN TO GENUINENESS OF ACTIVITIES OF T HE SOCIETY. IN ANY CASE THERE IS NOTHING TO SUGGEST AS TO WHETHER OR NOT THE LD. CIT CONDUCTED ANY INDEPENDENT ENQUIRIES TO ASCERTAIN THE GENUINENESS OF ACTIVITI ES OF THE SOCIETY BEFORE REJECTING THE APPLICATION FOR REGISTRATION. IN THESE CIRCUMS TANCES ESPECIALLY WHEN THE APPLICANT SOCIETY DID NOT PLACE THE ORIGINAL INSTRU MENT OF ITS ESTABLISHMENT BEFORE THE LD. CIT WE CONSIDER IT FAIR AND APPROPRIATE T O VACATE THE FINDINGS OF THE LD. CIT AND RESTORE THE MATTER TO HIS FILE WITH THE DIR ECTIONS TO ALLOW A FINAL OPPORTUNITY TO THE ASSESSEE FOR ESTABLISHING GENUIN ENESS OF THE ACTIVITIES OF THE SOCIETY IN THE LIGHT OF AIMS AND OBJECTS STIPULATED IN THE MEMORANDUM OF THE SOCIETY AND THEREAFTER PASS A SPEAKING ORDER IN AC CORDANCE WITH LAW .INTER ALIA THE SOCIETY SHALL PLACE BEFORE THE LD. CIT THE ORI GINAL INSTRUMENT OF ITS ESTABLISHMENT .WE MAY CLARIFY THAT THE LD. CIT IS F REE TO UNDERTAKE ANY INDEPENDENT ENQUIRIES NECESSARY TO ASCERTAIN THE GENUINENESS OF ACTIVITIES OF THE SOCIETY. WITH THESE DIRECTIONS GROUND NOS.1 TO 3 IN THE APPEAL ARE DISPOSED OF. 6. IN RESULT APPEAL IS ALLOWED BUT FOR STATISTIC AL PURPOSES. SD/- SD/- (R.P. TOLANI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) ORDER PRONOUNCED IN OPEN COURT ITA NO.4694/DEL./2011 10 NS COPY OF THE ORDER FORWARDED TO :- 1. M/S GANESHEE LAL EDUCATION SOCIETY C/O GL PUBLIC SCHOOL KOSLI ROAD KANINA DISTRICT :MAHENDERGARH 2. ASSTT. CIT REWARI CIRCLE REWARI. 3. CIT ROHTAK. 4. DR ITAT C BENCH NEW DELHI 5. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT DELHI