[aaykarbhavan] IT:"no one can do charity by taking loans" is Not a valid reason for denying sec 12AA registration

Hon'ble Agra ITAT while deciding a issue of 12AA registration has held
We find that learned Commissioner has rejected the application for
registration under
Section 12AA of the Act on the basis of sweeping generalization having
doubts
on the activities of the assessee applicant. In our considered view at the
stage of
granting registration under Section 12AA of the Act all that is required to
be seen
is whether the objects of the applicant are indeed charitable in nature or
not, as
also the fact that activities of the applicant are genuine. There are no
specific
adverse findings on any of these two aspects of the matter. While learned
Commissioner has observed that there are doubts with regard to the notice
of the
society he has not elaborated on same. As per his observation that "no one
can do
charity by taking loans", we are unable to see any reliance of sweeping
generalization in the present context because it is not the charity, which
is being
done out of the borrowed funds, but it is a charitable activity, which is
being done
with the help of borrowing as may be necessary to conduct the activities of
the
assessee applicant. It could perhaps make sense people do not borrow money
to
give the same in charity, but in order to carryout a systematic activity,
with
charitable objects, it may be possible to resort to borrowing. In view of
the
matter, merely because and institution has borrowed funds, one cannot
conclude
that the objects of such institution cannot be charitable. The assessee may
borrow
funds for fulfillment of its objects, therefore, we have stated in framing
words,
the mere facts of borrowing cannot be against the assessee at the stage of
grant of
registration.


copy of judgement enclosed
Regards
Prarthana Jalan


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Posted by: Nitesh More <moreassociate@gmail.com>
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