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
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.
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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