- (1.) This appeal was admitted on the following questions : 1. Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was legally correct in giving directions to the Commissioner of Income-tax-II, Lucknow, to grant registration to the society under section 12AA of the Income-tax Act, 1961 ? 2. Whether, on the facts and in law, the learned Income-tax Appellate Tribunal was legally correct in holding that where the aims and objects appear charitable in nature as per the memorandum, the registration should be granted to the society ? 3. Whether the learned Income-tax Appellate Tribunal was erred in law and on facts in directing the Commissioner of Income-tax-II, Lucknow, to grant registration to the society against the facts narrated by the Commissioner of Income-tax-II, Lucknow, in his order that no activities of charitable nature were carried on by the society.
(2.) The present society, which is the respondent here, had applied for registration under section 12AA of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The authority, namely, the Commissioner (appellant herein) by a speaking order dated October 28, 2004, for the assessment year 2003-04, held that the activities of the applicant are only for commercial purposes and to gain personal profit. Accordingly, he refused to register the society under section 12AA(1)(b)(ii) of the Act. The learned Commissioner has also noted that there was an erstwhile society, known as "Lucknow Shikshan Sansthan" which was registered on September 9, 1987, and the said society, in the course of its functioning, had four branches in the name of "New Public Inter College". A resolution was passed in the general meeting of that society on June 5, 2002, to dissolve the society and devolve the movable and immovable assets of the society to the three societies with similar objectives. The society "Lucknow Educational and Social Welfare Society" by devolution inherited the movable and immovable assets located at the branches "New Srinagar" and "Krishna-nagar". As the erstwhile society never compiled its accounts, hence no final accounts reflecting the value of fixed assets existed at the time of dissolution. The learned Commissioner (appellant) also noted that the assessee-society was asked to furnish registration proof of "Lucknow Shikshan Sansthan" as well as its "Smriti Patra" and "Niyamawali". In response thereto, the copy of registration certificate of the "Lucknow Shikshan Sansthan" was furnished but its "Smriti Patra" and "Niyamwali" were not produced. The appellant herein proceeded in the absence of the same and opined that it was not known whether the society existed for charitable purpose only or for the purpose other than charitable purpose or for both and whether the erstwhile society was having similar objectives as the applicant-society. Thereafter, the appellant proceeded to examine the books of account, case law relied upon by the respondent herein and came to the conclusion which he has arrived at.
(3.) Thereafter, this matter was taken up in appeal before the Income-tax Appellate Tribunal (ITAT). The learned Income-tax Appellate Tribunal considered the requirement for registration under section 12AA of the Act. It observed that while granting registration, the Commissioner of Income-tax has to examine the two aspects for registration of a society--Firstly, whether the activities of the society were genuine and, secondly, whether the object of the society was charitable. The Income-tax Appellate Tribunal thereafter recorded a finding that there was no dispute that the assessee was running an institution, which is a genuine activity and that the object for which the society was formed has been given in the "Smriti Patra". All the objects were of the general public utility. A finding was recorded that there was no evidence on record before the Commissioner of Income-tax to record a finding that the objects of the society were not charitable and, therefore, from the documents filed therein, the assessee has satisfied the conditions for registration under section. 12AA of the Act and accordingly issued the directions. This order was passed on July 7, 2005, which has been challenged before this court by the appellant-Commissioner of Income-tax-II, Lucknow.;