- (1.) THE present appeal under Section 260 A of the Income Tax Act, 1961 (for short 'the Act') is directed against an order passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (for short 'the Tribunal') on 24.05.2013, whereby an appeal against an order passed by the Commissioner of Income Tax -I, Chandigarh declining registration under Section 12AA of the Act was dismissed.
(2.) THE appellant was registered as a Society on 13.04.2012. The appellant filed an application for registration of a Society under Section 12AA of the Act. A perusal of the order passed by the Commissioner of Income Tax shows that one 'Shishu Niketan Model School' is an existing Society registered under Section 12AA of the Act. The said Society is running four schools i.e. two in Chandigarh, one each in Mohali and in Panchkula. The appellant was established to take over on lease the management of one of the schools. The Commissioner found that the appellant has only proposal to take on lease the management of the existing school, but it has not yet taken over the school, meaning thereby that no activities have yet been carried out. The Commissioner declined the registration, inter alia, for the reason that it is an attempt of the assessee to split up assets of an already existing society and conveniently pass it over to a new one with sole intention of evading tax liability. In all probabilities, it will defeat the very purpose for which the exemption provisions have been contained in the Act.
(3.) IN appeal, the Tribunal, inter alia, observed that the assessee has wide range of objects, which are in different directions and different fields and are general in nature. Keeping in view the 'Note of Activity' furnished by the assessee before the Commissioner, the Tribunal found that the appellant was proposing to take over on lease the management of one of the existing school and running it on day -to -day basis, but the assessee has not identified the primary objects, which the Society wants to undertake in order to carry on its charitable activities. Once the purpose of the Trust has not been established, therefore, the genuineness of the activities cannot be verified. The Tribunal concluded as under: "24. In view thereof, the Commissioner is to look into the objects of the society to determine whether the same are charitable in nature on not. In the facts of the present case and as held by us in the paras hereinabove, on consideration of the factual aspects we find that some of the objects of the assessee society are not charitable in nature and we are in conformity with the finding of the Commissioner of Income Tax that though the assessee society was registered with Registrar of Societies on 13.04.2012, but no activity had been started up to the date of present proceedings and in the absence of the same there was no material to verify the objects and activities of the society and their genuineness. In view thereof, we uphold the order of Commissioner in refusing to grant registration to the assessee under Section 12AA of the Act and the grounds of appeal raised by the assessee are thus dismissed." Before this Court, the assessee has framed as many as six substantial questions in the memorandum of appeal, but we find that following substantial question of law arises for consideration: "Whether in the facts and circumstances of the case, the respondent erred in denying the registration under Section 12AA of the Act to the appellant on the grounds that the appellant Society had not commenced its charitable functions -;