TRAVANCORE EDUCATION SOCIETY Vs. CIT
INCOME TAX APPELLATE TRIBUNAL
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N.R.S.Ganesan, Member (J) -
(1.) THE assessee has filed the present appeal against the order of the Administrative Commissioner rejecting the application for registration u/s. 12AA of the Act.
(2.) SHRI S. Rajeev, the ld. counsel for the assessee submitted that the assessee was under the bona fide impression that the educational institutions are exempted from income -tax, therefore, the assessee has not filed any return of income in the regular course. The assessee has not filed any application for registration u/s. 12AA also. However, there was a search in the premises of the assessee. Consequent to the search operation, the assessee filed the return of income. The claim of the assessee for exemption was rejected on the ground that the trust was not registered u/s. 12AA of the Act, therefore, the assessee filed application for registration. According to the ld. counsel, the assessee is a charitable trust. The assessee established an educational institution in the name of Travancore Engineering College at Oyoor. Establishing and running educational institution is one of the objects of the assessee trust. Referring to the order of the Administrative Commissioner, the ld. counsel submitted that there is no violation of section 11(5) or section 13(1)(c) as claimed by the Administrative Commissioner. No money of the trust was taken by the trustees at any time. The educational institution is not collecting any capitation fee as claimed by the Administrative Commissioner. According to the ld. counsel, what is to be seen at the time of registration is the object of the trust and its genuineness. Since the object of the trust is to establish an educational institution and the assessee has, admittedly, established an educational institution, the Administrative Commissioner cannot refuse the registration u/s. 12AA of the Act.
(3.) ON the contrary, Shri M Anil Kumar, the ld. DR submitted that the assessee trust is not carrying out any charitable activities. Though the assessee is running educational institution, during the course of search operation it was found that the assessee was collecting capitation fees from the students, who seek admission over and above the prescribed fee. It is also admitted by the secretary that the capitation fee collected by the institution was shared amongst the members and the members of the managing committee. Therefore, it is obvious that the educational institution was run on a commercial basis for profit. Therefore, according to the ld. DR, the assessee is not eligible for registration as a charitable institution.;
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