See the below list of Objectives of Co-operative society.
Income Tax Act, 1961
Section 80P. DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES.
(1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.
(2) The sums referred to in sub-section (1) shall be the following, namely :- (a) In the case of a co-operative society engaged in - (i) Carrying on the business of banking or providing credit facilities to its members, or
(ii) A cottage industry, or
(iii) The marketing of the agricultural produce grown by its members, or
(iv) The purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or
(v) The processing, without the aid of power, of the agricultural produce of its members,
(vi) The collective disposal of the labour of its members, or
(vii) Fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities :
Provided that in the case of a co-operative society falling under sub-clause (vi) or sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely :- (1) The individuals who contribute their labour or, as the case may be, carry on the fishing or allied activities;
(2) The co-operative credit societies which provide financial assistance to the society;
(3) The State Government;
(b) In the case of a co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by its members to-
(i) A federal co-operative society, being a society engaged in the business of supplying milk, oilseeds, fruits or vegetables, as the case may be; or
(ii) The Government or a local authority; or
(iii) A Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business;
(c) In the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed, - (i) Where such co-operative society is a consumer's co-operative society, one hundred thousand rupees; and
(ii) In any other case, thousand rupees.
Explanation : In this clause, "consumers' co-operative society" means a society for the benefit of the consumers;
(d) In respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;
(e) In respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income;
(f) In the case of a co-operative society, not being a housing society or an urban consumers' society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities or any income from house property chargeable under section 22.
Explanation : For the purposes of this section, an "urban consumers' co-operative society" means a society for the benefit of the consumers within the limits of a municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment.
(3) In a case where the assessee is entitled also to the deduction under section 80HH, or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA or section 80J or section 80JJ, the deduction under sub-section (1) of this section, in relation to the sums specified in clause (a) or clause (b) or clause (c) of sub-section (2), shall be allowed with reference to the income, if any, as referred to in those clauses included in the gross total income as reduced by the deductions under, section 80HH, section 80HHA, section 80HHB section 80HHC, section 80HHD, section 80-I, section 80-IA, section 80J and section 80JJ.
http://www.incometaxindiapr.gov.in/incometaxindiacr/circulars.jsp
C B D T Circular for clarification 80P. Visit above link.
http://www.caclubindia.com/articles/an-brief-overview-of-section-80p-9722.asp#.UK5zL8X6f3U
Brief over view of 80P. Link above.
C A Shah D J
USA
From: bala cvs <bala_cvs@yahoo.com>
To: "ca_expert_team@yahoogroups.com" <ca_expert_team@yahoogroups.com>; AAYKARBHAVANGOOGLE <aaykarbhavan@googlegroups.com>; aaykarbhavan <aaykarbhavan@yahoogroups.com>; "ahmedabadcas@yahoogroups.com" <ahmedabadcas@yahoogroups.com>; ALWAR CA GROUP <ALWAR_CHARTERED_ACCOUNTANTS@yahoogroups.com>; aurangabadcas <aurangabad_ca@yahoogroups.com>; C A Bhupendra Shah Mumbai <GlobalIndianCAs-owner@yahoogroups.com>; C A Dipak Jain <djain128@gmail.com>; C A Krishanlal Bansal <klbansal@gmail.com>; C A Madhusoodan Kakkad. <camnkakkad@gmail.com>; C A of Thane <ThaneCAs@yahoogroups.com>; C A Pune Groupd <casofpune-subscribe@yahoogroups.com>; CA News <CANEWS@yahoogroups.com>; cacscw india group <cacscwaindia@yahoogroups.com>; "cacscwaindia@yahoogroups.co.in" <cacscwaindia@yahoogroups.co.in>; "CAForumHyd@yahoogroups.com" <CAForumHyd@yahoogroups.com>; Chartered Secretaries <chartered_secretary@yahoogroups.com>; "Chartered_accountant@egroups.com" <Chartered_accountant@egroups.com>; chartered accountant <Chartered_accountant@yahoogroups.com>; Company Secretaries Yahoo.Groups <aicsc@yahoogroups.com>; Company Secretary <company_secretary@googlegroups.com>; Company Secretary <company_secretary@yahoogroups.com>; CS A Rengarajan <csarengarajan@gmail.com>; CS <cs_companysecretaries@yahoogroups.com>; CS_MYSORE GROUP <csmysore@googlegroups.com>; Finpros Furum <finpros@yahoogroups.com>; ghaziabadca <ghaziabad_ca@yahoogroups.com>; icai-circ_ meerut <ICAI_CIRC_MEERUT_CA@yahoogroups.com>; itaxusers <itaxusers@googlegroups.com>; Jaipur CA <Jaipur_CA@yahoogroups.co.in>; JAIPUR CA JAIPUR CA GROUP <jaipurca@yahoogroups.com>; Jalgaon ICAI <jalgaon@icai.org>; Jalgaon C A <jalgaoncas@googlegroups.com>; lawprofessional Moderator <lawprofessional-owner@yahoogroups.com>; lucknow C A Group <lucknow-ca@yahoogroups.com>; lucknow <Lucknowca_reinvented@yahoogroups.com>; New Delhi CA forum <new_delhi_ca@yahoogroups.com>; "nicsi@yahoogroups.co.in" <nicsi@yahoogroups.co.in>; "Panipat_CA@yahoogroups.com" <Panipat_CA@yahoogroups.com>; CA RUNGTA PD <pdrungta@gmail.com>; "Ranchi_Chartered_Accountants@yahoogroups.com" <Ranchi_Chartered_Accountants@yahoogroups.com>; "sensitiveadvisor2008@yahoogroups.co.in" <sensitiveadvisor2008@yahoogroups.co.in>; taxfin <taxfinsoft@yahoogroups.com>
Sent: Thursday, 22 November 2012 3:25 AM
Subject: Re: (CA Expert Team) Judgments,, CA Club India, DNA NWes,
Sir,
A Co-Op. Society doing exclusive labour contract works(no material involvement) like Road sweeping contractors, whether such society is eligible to get deduction U/s 80P? Pl. clarify .asap.
Regards,
CVS.BALACHANDRA RAO & CO.,
Chartered Accountants
D.No:3-6-108/1, Flat No:203, Sanatana Eternal,
St.No:19, Himayatnagar, Hyderabad - 500029.
Ph.No:(040) 23225111, 64615111
+91 98490 35315
Email:bala_cvs@yahoo.com,
CVS.BALACHANDRA RAO & CO.,
Chartered Accountants
D.No:3-6-108/1, Flat No:203, Sanatana Eternal,
St.No:19, Himayatnagar, Hyderabad - 500029.
Ph.No:(040) 23225111, 64615111
+91 98490 35315
Email:bala_cvs@yahoo.com,
From: Dipak Shah <djshah1944@yahoo.com>
To: AAYKARBHAVANGOOGLE <aaykarbhavan@googlegroups.com>; aaykarbhavan <aaykarbhavan@yahoogroups.com>; "ahmedabadcas@yahoogroups.com" <ahmedabadcas@yahoogroups.com>; ALWAR CA GROUP <ALWAR_CHARTERED_ACCOUNTANTS@yahoogroups.com>; aurangabadcas <aurangabad_ca@yahoogroups.com>; C A Bhupendra Shah Mumbai <GlobalIndianCAs-owner@yahoogroups.com>; C A Dipak Jain <djain128@gmail.com>; C A Krishanlal Bansal <klbansal@gmail.com>; C A Madhusoodan Kakkad. <camnkakkad@gmail.com>; C A of Thane <ThaneCAs@yahoogroups.com>; C A Pune Groupd <casofpune-subscribe@yahoogroups.com>; CA News <CANEWS@yahoogroups.com>; "ca expert team@yahoogroups.com" <ca_expert_team@yahoogroups.com>; cacscw india group <cacscwaindia@yahoogroups.com>; "cacscwaindia@yahoogroups.co.in" <cacscwaindia@yahoogroups.co.in>; "CAForumHyd@yahoogroups.com" <CAForumHyd@yahoogroups.com>; Chartered Secretaries <chartered_secretary@yahoogroups.com>; "Chartered_accountant@egroups.com" <Chartered_accountant@egroups.com>; chartered accountant <Chartered_accountant@yahoogroups.com>; Company Secretaries Yahoo.Groups <aicsc@yahoogroups.com>; Company Secretary <company_secretary@googlegroups.com>; Company Secretary <company_secretary@yahoogroups.com>; CS A Rengarajan <csarengarajan@gmail.com>; CS <cs_companysecretaries@yahoogroups.com>; CS_MYSORE GROUP <csmysore@googlegroups.com>; Finpros Furum <finpros@yahoogroups.com>; ghaziabadca <ghaziabad_ca@yahoogroups.com>; icai-circ_ meerut <ICAI_CIRC_MEERUT_CA@yahoogroups.com>; itaxusers <itaxusers@googlegroups.com>; Jaipur CA <Jaipur_CA@yahoogroups.co.in>; JAIPUR CA JAIPUR CA GROUP <jaipurca@yahoogroups.com>; Jalgaon ICAI <jalgaon@icai.org>; Jalgaon C A <jalgaoncas@googlegroups.com>; lawprofessional Moderator <lawprofessional-owner@yahoogroups.com>; lucknow C A Group <lucknow-ca@yahoogroups.com>; lucknow <Lucknowca_reinvented@yahoogroups.com>; New Delhi CA forum <new_delhi_ca@yahoogroups.com>; "nicsi@yahoogroups.co.in" <nicsi@yahoogroups.co.in>; "Panipat_CA@yahoogroups.com" <Panipat_CA@yahoogroups.com>; CA RUNGTA PD <pdrungta@gmail.com>; "Ranchi_Chartered_Accountants@yahoogroups.com" <Ranchi_Chartered_Accountants@yahoogroups.com>; "sensitiveadvisor2008@yahoogroups.co.in" <sensitiveadvisor2008@yahoogroups.co.in>; taxfin <taxfinsoft@yahoogroups.com>
Sent: Thursday, 22 November 2012 7:01 AM
Subject: (CA Expert Team) Judgments,, CA Club India, DNA NWes,
Published Date: Nov 22, 2012 Copyright restricted. For reprint rights click here New rules to impact your returns on Ulips | |||||
Aswathy Varughese l Mumbai | |||||
New investment norms for insurers are seen bringing down the returns on unit linked plans (Ulips) further. "Investment guidelines are restrictive in terms of market-linked plans. The sectoral exposure will prevent unit linked plans from getting market-rate returns," said the chief investment officer of a private life insurance company. In the draft guidelines, the Insurance Regulatory and Development Authority (Irda) had reduced the sectoral equity exposure – the proportion of total funds that an insurer can devote to a particular sector – from 25% to 15%. The final guidelines are expected to be announced early next week, said a source close to the development. "Investment guidelines are expected to be out early next week. All ground works have been done regarding this and the specified changes will definitely change the investment climate for insurance industry." Here are some of the other changes in the offing. More investment options The draft guidelines propose to allow life insurers to participate in equity derivatives, interest rate swaps, credit default swaps (CDS) and securities lending and borrowing in order to better hedge their equity exposures. Equity derivatives have equity shares as the underlying assets, based on which their value fluctuates. An interest rate swap is an agreement between two parties (known as counter-parties) where one stream of future interest payments is exchanged for another based on a specified principal amount. CDS, on the other hand, is a contract where an investor or a lender in bonds gets a cover against default by the other party that engages in a swap. These products will allow insurers to diversify and hedge their long-term risks. In this segment, both companies engaging in CDS will be rated, though the promoter companies cannot engage in CDS. What's more, the insurers are likely to be allowed to invest in government and corporate debt securities. Debt exposure reduced As per the new norms, insurer's debt exposure limit will be reduced from 85% to 50% as new categories of investment avenues are opened up. "This will shift some funds from traditional debt instruments to other investment options. Hence, the proportion of debt exposure will come down," added the source. Infrastructure debt funds In a bid to increase fund flows to infrastructure, the finance ministry has suggested the insurance regulator allow insurers to invest in infrastructure debt funds. Hence, the expected guidelines may have specified limit of 15% and 5% for life and non-life companies, respectively, to invest in such funds. Irda also proposes that insurers can invest in those category, which are capable of being rated as per the market practice. It also says corporate bonds or debentures rated not less than AA or its equivalent and P1 or equivalent ratings for short-term bonds, debentures, certificate of deposit and commercial paper, by a credit rating agency, registered under Sebi (Credit Rating Agencies) Regulations would be considered as 'Approved Investments'. Earlier, insurance companies were allowed to invest in AAA-rated bonds. In order to give confidence to insurers for investing in infrastructure debt funds, the government plans to give credit enhancement by way of credit guarantee by a third party in case of a default. Also, equity exposure in a single company is retained at 10%. Besides, an insurance firm cannot hold more than 15% of its investment assets in companies belong to the same group. aswathy.rachel@dnaindia.net |
 | Order not supported by reasoning deserve to be set aside |
| Posted on 21 November 2012 by Apurba Ghosh | |
CourtINCOME TAX APPELLATE TRIBUNAL BriefThe relevant facts borne out from the assessment order are that as against the returned income of Rs.89,130/- the income was assessed at Rs.6,18,135/- wherein the Assessing Officer made additions on account of undisclosed capital gain; unexplained agricultural income and income from other sources. CitationSmt. Zeenat Begum, Madarsa Kohna,Rampur (U.P.). PAN: AHMPB7675M (Appellant) Vs. Income-tax Officer-II, Rampur.(Respondent) Judgement IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'H': NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A.No.344/Del/2012 Assessment Year : 2006-07 Smt. Zeenat Begum, Madarsa Kohna, Rampur (U.P.). PAN: AHMPB7675M (Appellant) Vs. Income-tax Officer-II, Rampur. (Respondent) Appellant by : None Respondent by : Mrs. Meeta Sinha, Sr. DR O R D E R PER DIVA SINGH, JUDICIAL MEMBER This is an appeal filed by the assessee against the order dated 4.10.2011 of the Commissioner of Income-tax (Appeals), Bareilly pertaining to the Assessment Year 2006-07 raising various grounds on facts and merit. 2. At the time of hearing no one was present on behalf of the assessee despite the fact that notice for the date of hearing had been issued on 28.05.2012. However, on a perusal of the impugned order it was considered appropriate to decide the present appeal ex parte qua the assessee-appellant on merit after hearing the learned DR. 3. The relevant facts borne out from the assessment order are that as against the returned income of Rs.89,130/- the income was assessed at Rs.6,18,135/- wherein the Assessing Officer made additions on account of undisclosed capital gain; unexplained agricultural income and income from other sources. 4. Aggrieved by this the assessee went in appeal before the CIT(A) who after making various efforts to serve the notice upon the assessee which remained un-complied with on all occasions except one i.e. on 26th March, 2010, the date on which adjournment was sought, proceeded to dispose of the appeal of the assessee holding that the assessee was not keen to pursue the appeal. In the circumstances, relying upon the decisions in the cases of B.N. Bhattachargee, 118 ITR 461 (SC); Estate of Late Tukojirao Holkar, 223 ITR 480 (MP); & New Diwan Oil Mills (2008) 296 ITR 495 (P&H), the appeal of the assessee was dismissed on the specific ground that the assessee had failed to attend the appeal proceedings. 5. We have heard the submissions advanced by the Sr. DR and considered the orders of the authorities below. On a careful consideration of the same we are of the view that the impugned order deserves to be set aside as the same is not in conformity with the requirements of the provisions of law as the conclusion in upholding the assessment order is not supported by any reasoning. Recording of reasons is a part of fair procedure as reasons are the harbinger between the mind of the maker of the decision in the controversy and the decision or conclusion arrived at. They substitute subjectivity with objectivity and failure to give reasons amounts to denial of justice, as has been held by the Apex court in the case of Mangalore Ganesh Beedi Works vs. CIT (2005) 273 ITR 56 (SC). Reasons however brief are the soal and backbone of the order. A perusal of sec. 250(6) of the Act shows that the statute mandatorily requires the CIT(A) while deciding the appeal to set out the issues for determination; and the decision thereon along with reasons for the decision. The said exercise which is necessary is missing in the impugned order. In the light of the above peculiar facts, circumstances and position of law, we are of the view that the action of the CIT(A) was not in conformity with the requirements of the Income-tax Act. Accordingly it is considered appropriate to restore the issue back to the file of the CIT(A) with the direction to decide the appeal by way of a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. 6. In the result, the appeal is allowed for statistical purposes. 7. The order was pronounced in the Open Court on the date of hearing i.e. 16th October, 2012. Sd/- Sd/- (T.S. KAPOOR) (DIVA SINGH) ACCOUNTANT MEMER JUDICIAL MEMBER Dated: 16th October, 2012. Copy of the order forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR By Order *mg Deputy Registrar, ITAT.
|
| | In the interests of justice issue can restore back to the file of the learned CIT(A) with appropriate direction |
| Posted on 21 November 2012 by Apurba Ghosh | |
CourtINCOME TAX APPELLATE TRIBUNAL BriefThis is an appeal filed by the assessee against the order dated 3.08.2010 of the Commissioner of Income-tax (Appeals)-XIX, New Delhi pertainng to the Assessment Year 2003-04 on various grounds. However, at the time of hearing the assessee filed an application seeking time which was rejected in view of ground No.1 raised by the assessee which reads as under:- "Action of the CIT(A) in passing Ex-Parte Order in unjust, illegal, arbitrary and against the facts and circumstances of the case." CitationV & S International (P) Ltd., S-22, Second Floor, Manish Global Mall,Sector-22, Dwarka. PAN: AAACV0030A,(Appellant) Vs.Income-tax Officer,Ward 17(4),New Delhi.(Respondent) Judgement IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'H': NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A.No.5347/Del/2010 Assessment Year : 2003-04 V & S International (P) Ltd., S-22, Second Floor, Manish Global Mall, Sector-22, Dwarka. PAN: AAACV0030A, (Appellant) Vs. Income-tax Officer,Ward 17(4), New Delhi. (Respondent) Appellant by : Mrs. Megha Bhasin, CA Respondent by : Shri Ramesh Chander, CIT-DR. O R D E R PER DIVA SINGH, JUDICIAL MEMBER This is an appeal filed by the assessee against the order dated 3.08.2010 of the Commissioner of Income-tax (Appeals)-XIX, New Delhi pertainng to the Assessment Year 2003-04 on various grounds. However, at the time of hearing the assessee filed an application seeking time which was rejected in view of ground No.1 raised by the assessee which reads as under:- "Action of the CIT(A) in passing Ex-Parte Order in unjust, illegal, arbitrary and against the facts and circumstances of the case." 2. A perusal of the impugned order showed that the learned CIT(A) gave various opportunities to the assessee by way of issuance of notices through speed post and on these occasions, the assessee did not attend, as such an ex parte order was passed. In view of ground No.1 which has been reproduced hereinabove, after hearing the parties, we are of the considered view that in the circumstances and in the interests of substantial justice, it would be appropriate to restore the issue back to the file of the learned CIT(A) with the direction to, decide the same by way of a speaking order in accordance with law after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to participate in the proceedings. 3. In the result, the appeal of the assessee is allowed for statistical purposes. 4. The order was pronounced in the Open Court on the date of hearing i.e. 18th October, 2012. Sd/- Sd/- (T.S. KAPOOR) (DIVA SINGH) ACCOUNTANT MEMER JUDICIAL MEMBER Dated: 18th October, 2012. Copy of the order forwarded to:-
*mg Deputy Registrar, ITAT. |
IT : Where assessee-society provided citizen's services to common people by charging very huge fees which was in addition to charges levied by State Government and was additional burden upon common man, activities of assessee could not be treated as charitable in nature making it eligible for registration under section 12AA
■■■
[2012] 27 taxmann.com 199 (Amritsar - Trib.)
IN THE ITAT AMRITSAR BENCH
Sukhmani Society For Citizen Services
v.
Commissioner of Income-tax, Bathinda*
H.S. SIDHU, JUDICIAL MEMBER
AND B.P. JAIN, ACCOUNTANT MEMBER
IT APPEAL NO. 551 (ASR.) OF 2011
SEPTEMBER 26, 2012
Section 2(15), read with section 12AA, of the Income-tax Act, 1961 - Charitable purpose - Object of general public utility - Services to citizens - Assessee society was formed on initiation and instructions of Government of Punjab to implement Suwidha (single user's friendly window disposal help line for applicants) - State Government had instructed all district offices to form societies on a similar pattern, with official website Suwidha.nic.in - Main object of society was to provide citizen's services to common people for their convenience and it was charging prescribed fee from citizen from providing services - It applied for registration under section 12AA - Commissioner perused chart produced by society showing charges received by society and he was of view that society charged as much as Rs. 1000 for issuing NOC for petrol pump, Rs. 500 for registration of marriage, Rs. 500 for NOC on building plan and so on - He was also of view that these charges were in addition to statutory fees charged by State Government Departments - He therefore, held that activity of society was in nature of trade, commerce or business for a fee and, accordingly, held that such activities were not charitable in nature and denied registration - Whether since society was doing business and charging huge fees from public which was in addition to prescribed fee of Punjab Government and moreover it had also failed to establish that its objects were charitable in nature, registration was rightly denied by Commissioner - Held, yes [Para 7.9] [In favour of revenue]
FACTS
Facts
• The assessee society was registered with the Additional Registrar Office, and formation of society was on initiation and instructions of Government of Punjab to implement 'Suwidha' (Single User's Friendly Window Disposal helpline for Applicants) and was a project of the State Government.
• The State Government had instructed all the District Offices to form societies on a similar pattern, with official website SUWIDHA.nic.in. The main object of the society was to provide single window services to the citizens against a minimum fees for their services and to provide services within scheduled time.
• It stated that the motive of the society was to provide services from a single window, taking up minimum possible charges as per chart of facilitation charges, which were fixed by the State Government. He had also produced copy of chart showing service-wise charges taken by the Society from the Citizens for rendering its services.
• The assessee applied for registration under section 12AA.
• The Commissioner, perused chart produced by society showing charges received by the society and he was of the view that the society charges as much as Rs. 1000 for issuing NOC for petrol pump, Rs. 500 for registration of marriage, Rs. 500 for NOC on building plan and so on. He was also of the view that these charges were in addition to the statutory fees charged by the State Government Departments. These charges/fees were charged by the society for providing alleged citizen services.
• He further held that activity of society was in the nature of trading, commerce or business and activity of rendering service in relation to the trade, commerce or business for a fee.
• Finally, the Commissioner also held that the society should have done all work and rendering services to the citizens which the State Government was supposed to perform without charging any such additional fees. Therefore, he was satisfied that the activities of the society/institutions not charitable in nature within the meaning of proviso to section 2(15) and it did not qualify to be treated as a charitable institution. Hence, he rejected the request of the assessee for grant of registration under section 12AA.
Issue for consideration
• Whether services provided by the assessee were charitable in nature?
HELD
Objects of society not charitable in nature
• The Commissioner examined the documentary evidence available with him and stated that the activities of the society are commercial in nature. He held that the objectives are such that activities of the society seem to be of commercial nature rather than of charitable nature. The objectives of such nature are as under:
(i) To workout and recommend the service fee or user charge that could be charged from the end customers for the approval of the competent authority and concerned departments/organizations over the above and the prescribed bill amount/fee/statutory fees for providing the services through Sukhmani Centres/Financial Institutions or Franchisees.
(ii) To buy, sell, let on hire, lease, trade, import, repair or otherwise deal with IT resources, services and support on turnkey basis like hardware, software, connectivity, networking, training, stationery, consumables etc. Including operational and managerial manpower, hiring of professionals, consultancy services by following the procedure prescribed. To ensure the other infrastructure requirements including site preparation and timely availability of the necessary resources for the various activities under the project.
(iii) To establish and maintain any agencies and franchises in the district for the conduct of the business of the society.
• The Commissioner also perused the income and expenditure accounts, and finally concluded that the above facts clearly reveals that the activities of society are of commercial in nature aimed at deriving profit and not for charity. [Para 7.6]
• After perusing the objects of the society, it is found that this society has been established for maintaining the agencies and franchises in the district for the conduct of the business of the society, which clearly establishes that the present society is doing business with other agencies and franchises in the district for the conduct of the business. None of the object of the society which shows that the present society is doing any charitable activities for the general public utility. The Commissioner, has also referred the matter to the ITO to verify the genuineness of the activities of the present society who vide his report has stated that the assessee has failed to produce books of account in the absence of which it is not possible to verify the genuineness of the activities of the society and the Assessing Officer has not recommended the case of the assessee for registration under section 12AA. Even otherwise, the assessee has failed to establish before the Commissioner (Appeals) that the society is doing any charitable work keeping in view its objects. Merely, mentioning about various objects in the nature of charitable activities in the Memorandum of Association, does not mean that the society is doing any charitable activities for the general public utility and is entitled for registration under section 12AA. According to section 12AA, the Commissioner on receipt of application for registration of a trust or institution has to satisfy himself about the genuineness of activities of the trust or institution. In the present case, the Commissioner, has made the inquiry from the concerned ITO, who has not recommended the case of the society for registration. Even otherwise, the assessee has also failed to establish that the objects of the society were charitable in nature. [Para 7.8]
Conclusion
• Keeping in view the aforesaid discussions, it is held that the activities of the assessee-society are not charitable in nature within the meaning of provisions of section 2(15) and it does not qualify to treat as charitable institution. The present society is doing its business and charging huge fees from the public which was in addition to the prescribed fee of the Punjab Government. Even otherwise, the fees charged by the present society is in addition to the burden forced upon the common-man. Because of this service has to be rendered by the Punjab Government free of cost to the public against the fee prescribed in the chart as reproduced in the foregoing paragraphs. No interference is called for in the well reasoned order passed by the Commissioner. Therefore, the impugned order is upheld by dismissing the present appeal filed by the assessee-society. [Para 7.9]
CASE REVIEW
CIT v. Haryana Warehousing Corpn. [2011] 196 Taxman 260/[2010] 8 taxmann.com 235 (Punj. & Har.); CIT v. Haryana Building & Other Construction Works Welfare Board [2011] 196 Taxman 255/[2010] 8 taxmann.com 234 (Punj. & Har.); CIT v. Gujarat Maritime Board [2007] 289 ITR 139 (Guj.); CIT v. Aggarwal Sabha Maharaja Aggarsain Bhawan [2011] 198 Taxman 172 (Mag.)/9 taxmann.com 291 (Punj. & Har.); Sanjeevamma Hanuman the Gowda Charitable Trust v. DIT (Exemptions) [2006] 285 ITR 327/155 Taxman 466 (Kar.); Bar Council of Maharashtra v. CIT [1980] 126 ITR 27 (Bom.) and CIT v. Dredging Corpn. of India [1988] 174 ITR 682/39 Taxman 301 (AP) (para 7.9) distinguished on facts.
CASES REFERRED TO
CIT v. Haryana Warehousing Corpn. [2011] 196 Taxman 260/[2010] 8 taxmann.com 235 (Punj. & Har.) (para 5), CIT v. Haryana Building & Other Construction Works Welfare Board [2011] 196 Taxman 255/[2010] 8 taxmann.com 234 (Punj. & Har.) (para 5), CIT v. Gujarat Maritime Board [2007] 289 ITR 139 (Guj.) (para 5), CIT v. Aggarwal Sabha Maharaja Aggarsain Bhawan [2011] 198 Taxman 172 (Mag.)/9 taxmann.com 291 (Punj. & Har.) (para 5), Sanjeevamma Hanuman the Gowda Charitable Trust v. DIT (Exemptions) [2006] 285 ITR 327/155 Taxman 466 (Kar.) (para 5), Bar Council of Maharashtra v. CIT [1980] 126 ITR 27 (Bom.) (para 5) amd CIT v. Dredging Corpn. of India [1988] 174 ITR 682/39 Taxman 301 (AP) (para 5).
Varinder Wadhwa for the Appellant. Amrik Chand for the Respondent.
ORDER
1. The Sukhmani Society for Citizen Services (Suwidha Centre) D.C. Office, Distt. Administrative Complex Mansa (hereinafter called the 'Society') filed an application for registration under section 12AA of the Income-tax Act, 1961 (In short the 'Act'), on 30.03.2011 in the prescribed form to the Ld. Commissioner of Income Tax, Bathinda. In order to verify the genuineness of the activities of the assessee-society, the ld. CIT, Bathinda called the Society along with complete set of books of account and other relevant documents for the last three years for 21.04.2011. In compliance of the same, the authorised representative of the Society attended the proceedings and furnished the requisite information. The application of the Society was referred to the ITO Ward 1(4), Mansa, to verify the genuineness of the activities of the Society, in compliance of the same, the Assessing Office vide his report dated 05.09.2011 stated that the Society has failed to produce the books of account in absence of which, it is not possible to verify the genuineness of activities of the Society and keeping in view all these facts, the AO did not recommend the case of the assessee for registration under section 12AA of the Act. The Jt. C.I.T. Range-1, also endorsed the findings of the A.O. The Ld. CIT Bathinda fixed the case for hearing in his office on 27.03.2011 and authorised representative of the Society attended the proceedings and also filed the requisite information alongwith the details of activities and other documents.
2. The Society is registered with the Additional Registrar of Societies, Mansa vide No.44 of 22.03.2004. The aims and objects of the Societies are contained in Memorandum of Association of the Society. After perusing the objects and functions of the Society, the Ld. CIT Bathinda is of the view that the activities of the Society are in commercial nature rather than charitable in nature. The Ld. CIT, Bathinda has also perused the income and expenditure of the society which reveals that the Society has been earning huge profit and, therefore, he was of the view that the activities of the Society are of commercial in nature and aimed at deriving profit and not for charitable purpose.
3. The Ld. CIT, Bathinda confronted the above said facts to the Society and the Society contended that the main object of the Society is to provide citizen's services to the common people for their convenience and the Society also explained that the Society receives application from the common citizen for various services on behalf of the departments of State Govt, forwards the same to the concerned department and deliver back the same to the citizen within a specified time frame. The Society is charging prescribed fee from the citizen for providing services. The Ld. CIT, Bathinda perused the chart produced by the Society showing charges received by the Society and he is of the view that the Society charges as much as Rs.1000/- for issuing NOC for petrol pump, Rs.500 for registration of marriage, Rs.500 for NOC on building plan and so on. He is also of the view that these charges are in addition to the statutory fees charged by the State Govt. Departments. These charges/fees are charged by the Society for providing alleged citizen services. The Ld. CIT, Bathinda finally held that the activity of the Society is in the nature of trading, commerce or business and activity of rendering service in relation to the trade, commerce or business for a fee. The Society provides certain services to the common man and charges fee for the same and this act of the Society hardly go to establish any charitable purpose. Finally, the Ld. CIT also held that the Society is doing all work and rendering services to the citizens which the State Govt. was supposed to perform without charging any such additional fees. Therefore, he is satisfied that the activities of the Society/Institutions not charitable in nature within the meaning of proviso to section 2(15) of the Act and it does not qualify to be treated as a charitable institution. Hence, he rejected the request of the assessee for grant of registration under section 12AA of the Act, vide impugned order dated 26.09.2011.
4. The assessee is aggrieved by the impugned order dated 26.09.2011 passed by the ld. CIT, Bathinda and filed the present appeal.
5. The Ld. counsel for the assessee stated that the Society was registered on 22.0.30004 with the Additional Registrar Office, Mansa and formation of the Society was on initiation and instructions of Government of Punjab to implement 'Suwidha' (Single User's Friendly Window Disposal helpline for Applicants) and is a project of the State Government. The State Govt. had instructed all the District Offices to form Societies on a similar pattern, with official website SUWIDHA.nic.in. The main object of the Society is to provide Single Window Services to the Citizens against a minimum fees for their services and to provide services within scheduled time. He further stated that the organisation of the Society was framed and Deputy Commissioner, Mansa is an Ex-officio member along with various other Additional Commissioners as well as Sub-Divisional Magistrates and other Officers of the District Mansa, as the office bearers for the completion of the Society. He further stated that the D.C. Mansa is the Chairman of the present Society and the Additional Deputy Commissioner (General) is a Member/Secretary, Additional Deputy Commissioner (Development) Member, SDM, Mansa and Executive Engineer, PWD, B&R, Mansa, are the Members of the Society. He stated that the motive of the society is to provide services from a single window, taking up minimum possible charges as per chart of facilitation charges, which are fixed by the State Government. He has also produced copy of chart showing service-wise charges taken by the Society from the Citizens for rendering its services. He has also drew our attention towards the object of the Society which are mentioned in the Memorandum of Association i.e. about 29 objects. He has also drew our attention towards present Board of Governors and stated that almost all the Board Members are high officials of the Punjab Government. Finally, he stated that the Society is working for charitable purposes as well as for public utility purposes and he requested that the Society deserves registration under section 12AA of the Act. But the Ld. CIT, Bhatinda has wrongly rejected the request of the assessee vide impugned order dated 26.09.2011. In support of his contention he has placed reliance on the following decisions:
(i) CIT v. Haryana Warehousing Corpn. [2011] 196 Taxman 260/[2010] 8 taxmann.com 235 (Punj. & Har.).
(ii) CIT v. Haryana Building & Other Construction Works Welfare Board [2011] 196 Taxman 255/[2010] 8 taxmann.com 234
(iii) CIT v. Gujarat Maritime Board [2007] 289 ITR 139 (Guj.)
(iv) CIT v. Aggarwal Sabha Maharaja Aggarsain Bhawan [2011] 198 Taxmann 172/9 taxmann.com 291 (Punj. & Har.)
(v) Sanjeevamma Hanuman the Gowda Charitable Trust v. DIT (Exemptions) [2006] 285 ITR 327/155 Taxman 466 (Kar.).
(vi) Bar Council of Maharashtra v. CIT [1980] 126 ITR 27 (Bom.)
(vii) CIT v. Dredging Corpn. of India [1988] 174 ITR 682/39 Taxman 301 (AP).
6. On the contrary, the Ld. DR, Sh. Amrik Chand, relied upon the order passed by the Ld. CIT, Bathinda and stated that the Society has not done any charitable as well as public utility work till date. The Ld. DR further stated that the assessee is charging a very huge fees from the public for rendering its services to the Society, which is in addition to the charges levied by the Punjab Government and is additional burden upon the common man. Lastly, he stated that the activities of the Society are not charitable in nature within the meaning of proviso to section 2(15) of the Act, because the assessee is doing its business and gaining a huge profit by doing the work of public and has not done any single charitable work till date. Therefore, the request of the assessee for registration of the Society u/s 12AA of the Act, has rightly been rejected by the Ld. CIT, Bathinda.
7. We have heard both the parties and perused the relevant records available with us. The Ld. counsel for the assessee filed a chart of services and charges against the services rendered by the Society that are about 36 in number. For the sake of convenience, we reproduce the 17 services rendered by the Society and the charges taken by the Society, which are as under:
| Sukhmani Society for Citizen Services | v. | CIT Bathinda | I.T.A. No. 551/ASR-2011 | ||||||
| Service | Facili. Charges | Time Frame | Financial Year 2008-09 | Financial Year 2009-10 | Financial Year 2010-11 | ||||
| (Rs.) | Days | No. of Cases | %age of Total | No. of Cases | %age of Total | No. of Cases | %age of Total | ||
| 1 | Issuance of Nationality Certificate | 20 | 15 | 0 | 0 | 0 | 0.00% | 11856 | 24.70% |
| 2 | Issuance of Birth Certificate | 20 | 7 | 5001 | 32.46% | 5419 | 11.62% | 7462 | 15.55% |
| 3 | Driving Licences related services | 20 | 7 | 0 | 0.00% | 20041 | 42.96% | 7326 | 15.26% |
| 4 | Arm Licences related Services | 500 | 45 | 4282 | 27.79% | 5855 | 12.55% | 5173 | 10.78% |
| 5 | Issuance of Affidavits | 20 | Same Day | 1036 | 6.72% | 4258 | 9.13% | 5011 | 10.44% |
| 6 | Registration of Vehicle Services | 100 | 5 | 0 | 0.00% | 6096 | 13.07% | 4675 | 9.74% |
| 7 | Issuance of Copy of a Document | 30 | 7 | 1473 | 9.56% | 1257 | 2.69% | 1904 | 3.97% |
| 8 | Issuance of Death Certificate | 20 | 7 | 975 | 6.33% | 951 | 2.04% | 1577 | 3.29% |
| 9 | Submission of Passport Applications | 100 | 20 | 2101 | 13.63% | 1654 | 3.55% | 1282 | 2.67% |
| 10 | Agriculture related | 100 | 30 | 274 | 1.78% | 779 | 1.67% | 614 | 1.28% |
| 11 | Non-Encumberence Certificate | 20 | 0 | 0 | 0.00% | 0 | 0.00% | 374 | 0.78% |
| 12 | Form seeling | 0 | 0 | 0 | 0.00% | 0 | 0.00% | 160 | 0.33% |
| 13 | Issuance of Surety Bonds | 50 | Same Day | 5 | 0.03% | 29 | 0.06% | 151 | 0.31% |
| 14 | Registration of Marriage | 500 | Same Day | 60 | 0.39% | 88 | 0.19% | 63 | 0.13% |
| 15 | Others | 0 | 0 | 202 | 1.31% | 218 | 0.47% | 373 | 0.78% |
| 16 | NOC of Petrol Pump | 1000 | 40 | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
| 17 | NOC for Building Plan | 500 | 30 | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
| TOTAL | 15409 | 46645 | 48001 | ||||||
| (COUNSEL FOR THE ASSESSEE (APPELLANT) | |||||||||
7.1 The Ld. CIT, Bathinda has also mentioned in para 3.3 at page 3 & 4 in the impugned order that the applicant has furnished a chart showing fee chargeable for providing various services to the citizens. A perusal of the chart shows that the applicant charges as much as Rs.1000/- for issuing NOC for petrol pump, Rs.500 for registration of marriage, Rs.500 for NOC on building plan and so on. It is pertinent to mention here that these charges are in addition to the statutory fees charged by the State Govt. Departments. These charges/fees are charged by the applicant for providing the alleged citizens services.
7.2 The Ld. counsel for the assessee has filed balance sheet as on 31.03.2009 in which the Society has shown liabilities and assets as well as Income & Expenditure account for the year ended 31.3.2009. For the sake of convenience, the balance sheet as on 31.03.2009 as well as Income & Expenditure for the period ended 31.03.2009 of the Society are reproduced as under:
Sukhmani Society for Citizen Services (D.C. Office), Mansa
Balance Sheet as on 31.03.2009
| Liabilities Amount | Amount (Rs) | Assets | ||
| General Funds | ||||
| O. Balance- | 3389932.99 | Fixed Assets (Details Attached) | 1452088.00 | |
| Less: Old Dep | 1028849.00 | |||
| Add : Tfd from | 1344307.50 | Telephone Security | 500.00 | |
| I & E A/C | 3705391.49 | Loan to Distt.Nazar | 143150.00 | |
| State Govt. | 500000.00 | Receivable from Ex. | 77860.00 | |
| Clerk cum Accountant | ||||
| Sh. Ashok Kumar. | ||||
| Security from Computer | 10000.00 | |||
| Bank Balances: | ||||
| S.B.O.P., Mansa | 1573840.99 | |||
| Amount More deposited in Bank Account | 270.0 | SBOP, Mansa ( I/A) | 371818.00 | |
| PNB, Budhlada | 334408.50 | |||
| SBOP, Sardulgarh | 257726.00 | |||
| Cash in Head | 4270.00 | |||
| 4215661.49 | 4215661.49 | |||
| Report :- | Subject to our Separate Audited for Report of Even Date | |||
| For Sanjeev Amar & Associates Chartered Accountants | ||||
| Place : Mansa | (Sanjeev Kumar) | |||
| Dated : 18.08.2009 | M. No. 500277 | |||
Sukhmani Society for Citizen Services (D.C. Office),Mansa
Income & Expenditure Account For The Period Ending 31.03.2009
| Expenditure Amount (Rs) | Amount (Rs) | Income | Amount |
| To Pb. State e-goverance Society, CHD | 381533.50 | By Receipts | 2592150.00 |
| By Bank Interest | 48843.00 | ||
| To Printing & Stationery | 29907.00 | ||
| To Salary | 539204.00 | ||
| To Bank Exp. | 490.00 | ||
| To Computer Repair | 27735.00 | ||
| To Audit Fee | 11000.00 | ||
| To Electricity Bill | 34028.00 | ||
| To Telephone | 5727.00 | ||
| To SMS Exp. | 945.00 | ||
| To Photostate | 1035.00 | ||
| To Electric Repair | 225.00 | ||
| To Travelling | 5150.00 | ||
| To Depreciation | 259706.00 | ||
| To Income over Exp. | 1344307.50 | ||
| 2640933.00 | 2640933.00 |
| Report :- | Subject to Our Separate For Report of Even Date | |
| For Sanjeev Amar & Associates Chartered Accountants | ||
| Place : Mansa | (Sanjeev Kumar) | |
| Dated : 18.08.2009 | M. No. 500277 |
7.3 Similarly, the balance sheet as on 31.03.2010 as well as the Income & Expenditure account for the period ending 31.03.2010 are also reproduced as under:
Sukhmani Society For Citizen Services (D.C. Office), Mansa
Balance Sheet As On 31.03.2010
| Liabilities Amount | Amount (Rs) | Assets | ||
| General Funds | Fixed Assets | 1431952.00 | ||
| O. Balance- | 3705391.49 | (Details Attached) | ||
| Add : Tfd from | 1487573.50 | Telephone Security | 500.00 | |
| I & E A/C | 5192964.99 | Loan to Distt.Nazar | 15000.00 | |
| Security from Computer Supplier | 10000.00 | SDM Budhlada. | 3000.00 | |
| Ch. Issued not Presented | 16356.00 | S.B.O.P.(Sweep in) | 2784690.00 | |
| Bank Balance : | ||||
| S.B.O.P, Mansa | 50281.00 | |||
| SBOP, Mansa ( I/A) | 377866.00 | |||
| PNB, Budhlada | 9349.00 | |||
| SBOP, Budhlalda | 296960.00 | |||
| SBOP, Sardulgarh | 429722.00 | |||
| 5219320.99 | 5219320. | |||
| Report : - | SUBJECT TO OUR SEPARATE AUDITED FOR REPORT OF EVEN DATE | |||
| FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCOUNTANTS | ||||
| PLACE : MANSA | (SANJEEV KUMAR) | |||
| DATED : 22.06.2010 | M. No. 500277 | |||
Income & Expenditure Account For the Period Ending On 31.3.2010
| Expenditure | Amount | Income | Amount |
| To Pb. State e-governance Society Chd. | 486084.50 | By Receipts | 3420275.00 |
| To Printing & stationery | 146145.00 | By Bank Interest | 86517.00 |
| To Salary | 917004.00 | By Excess Deposit | 250.00 |
| To Bank Exp. | 911.00 | By Excess credit bank | 10.00 |
| To computer repair | 64880.00 | ||
| To Audit fee | 7000.00 | ||
| To electricity bill | 49702.00 | ||
| To Telephone | 10590.00 | ||
| To SMS Exp. | 1122.00 | ||
| To Advertisement | 13113.00 | ||
| To Electric Repair | 4969.00 | ||
| To Travelling | 2346.00 | ||
| To Misc. Exp. | 670.00 | ||
| To Postage | 500.00 | ||
| To Depreciation | 314442.00 | ||
| To Income over Exp. | 1487573.00 | ||
| 3507052.00 | 3507052.00 | ||
| Report :- | Subject to Our Separate For Report of Even Date | ||
| For Sanjeev Amar & Associates Chartered Accountants | |||
| Place : Mansa | (Sanjeev Kumar) | ||
| Dated : 22.06.2010 | M. No. 500277 | ||
7.4 Lastly, the balance sheet as on 31.03.2011 as well as Income & Expenditure account for the period ending 31.03.2011 are reproduced as under:
Balance Sheet as On 31.03.2011
| Liabilities Amount | Amount (Rs) | Assets | ||
| General Funds | Fixed Assets | 1285660.00 | ||
| O. Balance- | 5192964.99 | (Details Attached) | ||
| Add : Tfd from | 901085.93 | Telephone Security | 500.00 | |
| I & E A/C | 6094050.92 | Loan to Distt.Nazar | 15000.00 | |
| Security from Computer Supplier | 10000.00. | SDM Budhlada. | 3000.00 | |
| Salary Payable | 114120.00 | Stamp Paper and stamps | 40147.00 | |
| PSEGS Payable | 63697.00 | TDS | 45253.00 | |
| Ch. Issued not Presented | 358996.00 | NICI, Delhi | 352000.00 | |
| S.B.O.P(Sweep in) Bank Balances : | 4807579.58 | |||
| SBOP, Mansa | 3088.00 | |||
| SBOP, Budhlada | 8547.50 | |||
| SBOP, Sardulgarh | 3590.00 | |||
| SBOP, (NCC) Mansa | 75589.84 | |||
| Cash in Hand | 909.00 | |||
| 6640863.92 | 6640863.92 | |||
| Report :- | Subject To Our Separate Audited For Report of Even Date | |||
| For Sanjeev Amar & Associates Chartered Accountants | ||||
| Place : Mansa | (SANJEEV KUMAR) | |||
| Dated : 05.09.2011 | M. No. 500277 | |||
Income & Expenditure Account For the Period Ending On 31.3.2011
| Expenditure | Amount | Income | Amount |
| To Pb. State e-governance Society Chd. | 478259.50 | By Receipts | 3132591.00 |
| To Printing | 154873.00 | By Bank Interest | 327855.43 |
| To Salary | 1413932.00 | By Excess Deposit | 1969.00 |
| To Bank Exp. | 350.00 | By Excess credit bank | 10.00 |
| To Stationery | 74842.00 | ||
| To computer repair | 67450.00 | ||
| To Audit fee | 7000.00 | ||
| To electricity bill | 62279.00 | ||
| To Telephone | 14659.00 | ||
| To SMS Exp. | 279.00 | ||
| To Advertisement | 13084.00 | ||
| To Electric Repair | 8806.00 | ||
| To Travelling | 12760.00 | ||
| To Misc. Exp. | 3135.00 | ||
| To Depreciation | 223130.00 | ||
| To Income over Exp. | 901085.93 | ||
| 3462515.43. | 3462515.43 | ||
| Report :- | Subject to Our Separate Report of Even Date | ||
| For Sanjeev Amar & Associates Chartered Accountants | |||
| PLACE : MANSA | (SANJEEV KUMAR) | ||
| DATED : 05.09.2011 | M. No. 500277 | ||
7.5 After going through the aforesaid balance sheets as well as Income & Expenditure accounts of the assessee for the last three yeas, we have not found any expenditure incurred by the Society on charitable as well as public utility work. Almost all the expenditure has been incurred by the Society on printing and stationery, salary to their employees, Bank expenditure, Computer repair, Audit fee, Electricity Bill, Telephone, Electric repair, traveling, misc. expenditure, postage etc.
7.6 The present Society has filed an application to the Ld. CIT, Bathinda for registration. As per section 12AA of the Act, the Ld. CIT, Bathinda on receipt of an application for registration can call for such documents or information from the present society as he thinks necessary in order satisfy himself about the genuineness of the activities of the society and may also make such inquiries as he may deem necessary in this behalf. If the Ld. CIT, Bathinda is satisfied himself of the objects of the Trust of this Society and genuineness of its activities, he shall pass an order in writing registering the present society and if he is not satisfied then he shall pass order in writing refusing to register the Society after giving reasonable opportunity of being heard. In the present case also, the Ld. CIT, Bathnda referred the application of the Society to the ITO Ward 1(4), Mansa to verify the genuineness of activities of the present society and in compliance of the same, the AO vide his report dated 05.09.2011 has stated that the assessee has failed to produce books of account before him and in the absence of which, it is not possible to verify the genuineness of the activities of the present society and lastly the AO has not recommended the case of the assessee for registration u/s 12AA of the Act, through the Jt. CIT, Bathinda. After receiving the said report dated 05.09.2011 from the AO, the Ld. CIT, Bathinda fixed the case for hearing on 27.03.2011. After hearing the authorized representative of the assessee, the Ld. CIT examined the documentary evidence available with him and stated that the activities of the society are commercial in nature. He has also reproduced the same objects of the present society at pages 2 & 3 in para 3.1(i) to para 3(iii). For the sake of convenience, the objects of the society are reproduced hereunder:
"3.1. The applicant society is registered with the Addl. Registrar of Societies, Mansa vide No. 44 of 22.03.2004.The aims and objectives of the societies are contained in Memorandum of Association of the society, a copy of which has been obtained and is placed on file. As many as 29 objectives have been mentioned in the list in para 4 under the title Objectives and functions of the society. Some of the objectives are such that activities of the society seem to be of commercial nature rather than of charitable nature. The objectives of such nature are as under:
(i) To workout and recommend the service fee or user charge that could be charged from the end customers for the approval of the competent authority and concerned departments/organizations over the above and the prescribed bill amount/fee/statutory fee for providing the services through Sukhmani Centres/Financial Institutions or Franchisees.
(ii) To buy, sell, let on hire, lease, trade, import, repair or otherwise deal with IT resources, services & support on turkey basis like hardware, software, connectivity, networking, training, stationery, consumables etc. Including operational & managerial manpower, hiring of professionals, consultancy services by following the procedure prescribed. To ensure the other infrastructure requirements including site preparation and timely availability of the necessary resources for the various activities under the project.
(iii) To establish and maintain any agencies and franchises in the district for the conduct of the business of the society."
The Ld. CIT also perused the Income and Expenditure accounts, which we have reproduced hereinabove and finally concluded that the above facts clearly reveals that the activities of the Society are of commercial in nature aimed at deriving profit and not for charity.
7.7 We have also perused the Income & Expenditure accounts, which we have reproduced hereinabove as well as the impugned order alongwith relevant provisions of section 12AA of the Act and section 2(15) of the Act. For the sake of convenience, provisions of section 12AA and section 2(15) of the Act are reproduced as under:
"Section 12AA. (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of sub 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 satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deemed necessary in this behalf; and
(b) after satisfying himself about the objects of the 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 order in writing refusing to register the trust or institution,
and copy of the such order shall be sent to the applicant."
"Section 2(15): "charitable purpose" includes relief of the poor, education, medical relief, [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest,] and the advancement of any other object of general public utility."
7.8 Keeping in view the aforesaid discussions as per records as well as per documentary evidence given by the assessee, we find that the main project was initiated by the Govt. of Punjab in the month of August, 2002 at Fatehgarh Sahib. It was inaugurated by the Chief Minister of Punjab on 31.10.2002. The project was founded by the Govt. of India, Department of Communication & Information Technology. The Govt. of Punjab has decided to implement this project in all Districts of Punjab alongwith SUWIDHA Back-end Services (SUBS) of the Deputy Commissioner Branches in December, 2004. The project replication started in all districts with technical support of NIC-District Centres. As of now, the project is being executed in all Deputy Commissioner's offices. The appellant society is registered with the Additional Registrar of Societies, Mansa vide No.44 of 22.03.2004 and its aims and objects are contained in Memorandum of Association of the Society which we have already mentioned in the foregoing paragraphs. After perusing the objects of the Society, we find that the Ld. CIT, Bathinda, has reproduced some important objects of the Society in para 3.1 (pages 2 & 3) of the impugned order which shows that this society has been established for maintaining the agencies and franchises in the district for the conduct of the business of the society, which clearly establishes that the present society is doing business with other agencies and franchises in the district for the conduct of the business. We have not seen any object of the society which shows that the present society is doing any charitable activities for the general public utility. The Ld. CIT, Bathinda has also referred the matter to the ITO Ward 1(4), Mansa to verify the genuineness of the activities of the present society who vide his reported dated 05.09.2011 has stated that the assessee has failed to produce books of account in the absence of which it is not possible to verify the genuineness of the activities of the society and the AO has not recommended the case of the assessee for registration u/s 12AA of the Act. Even otherwise, the assessee has failed to establish before the ld. CIT(A) that the society is doing any charitable work keeping in view its objects. Merely, mentioning about various objects in the nature of charitable activities in the Memorandum of Association, does not mean that the Society is doing any charitable activities for the general public utility and is entitled for registration under section 12AA of the Act. According to section 12AA of the Act, the Commissioner on receipt of application for registration of a trust or institution has to satisfy himself about the genuineness of activities of the trust or institution. In the present case, the Ld. CIT, Bathinda has made the inquiry from the concerned ITO, who has not recommended the case of the Society for registration. Even otherwise, the assessee has also failed to establish that the objects of the society are charitable in nature.
7.9 Keeping in view the aforesaid discussions, we are of the considered view that the activities of the assessee-society are not charitable in nature within the meaning of provisions of section 2(15) of the Act and it does not qualify to treat as charitable institution. Since the assessee has not established that its society is formed with objects of any charitable purpose, then the question of discussion of citations relied upon by the Society does not arise, even otherwise these judgments are different from the facts of present case and are not helpful the Society. The present society is doing its business and charging huge fees from the public which is in addition to the prescribed fee of the Punjab Govt. Even otherwise, the fees charged by the present society is in addition to the burden forced upon the common-man. Because of this service has to be rendered by the Punjab Govt. free of cost to the public against the fee prescribed in the chart as reproduced in the foregoing paragraphs. We are of the considered opinion that no interference is called for in the well reasoned order passed by the ld. CIT, Bathinda. Therefore, we uphold the impugned order dated 26.09.2011 by dismissing the present appeal filed by the assessee-society.
8. In the result, the appeal filed by the assessee-society is dismissed.
Nitu__._,_.___
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