- (1.) This is an appeal filed by the Department under Section 260A of the Income-Tax Act, 1961 against the judgment and order dated 31.07.2009 passed by the Income Tax Appellate Tribunal, Lucknow in Appeal No. I.T.A. No. 228/Luc/2009.
(2.) The brief facts of the case are that assessee i.e. State Urban Development Agency (SUDA) was created on 20th November, 1990 and it was registered as Cooperative Society and became the State Autonomous Body as per the Article of Association. The SUDA i.e. the assessee had applied for the registration under Section 12A of the Income Tax Act as charitable institution, but the CIT has refused registration vide order dated 22.05.2007. Being aggrieved, the SUDA i.e. assessee has assailed the same before the Tribunal, who vide order dated 08.02.2008 has restored the matter back to the file of the CIT with certain directions to examine the matter afresh. But, vide his order dated 25.03.2009, again CIT has endorsed his earlier order, where registration under Section 12A of the Act was rejected. Not being satisfied, the assessee again assailed the same before the Tribunal, who vide impugned order has granted the registration. Being aggrieved, the Department has filed the present appeal.
(3.) With this background, Sri D.D. Chopra, learned counsel for the Department has justified the order passed by the CIT. He states that the genuineness of the accounts were not proved as the accounts of the society were not fully utilized for its objectives and the Auditor General of India had also raised objections regarding utilization/ application of funds for "general public utility". The Accountant General (Government of India) while auditing the accounts of the society has specifically commented that the assessee has failed to attain their objectives. It was stated that the expenses were not incurred for the purpose of objects mentioned in the Article of Association. So, the funds were not utilized properly.;