Section 12A – Charitable or religious trust – Registration of (Cancellation of) – Where assessee educational society, set up with various aims and objects including improvement in standard of education of backward students of rural areas, was running a school and Commissioner had not doubted genuineness of aims and objects of assessee, application u/s. 12A could not be rejected merely on ground that secretary of society was getting lease rent for land given to society for running school or his wife who had requisite qualification was teaching in school and was being paid salary

33. 
CIT (Exemption) vs. Ambala Public Educational Society; [2018] 100
taxmann.com 131 (P&H): Date of order: 29^th October, 2018

Section 12A – Charitable or religious trust
– Registration of (Cancellation of) – Where assessee educational society, set
up with various aims and objects including improvement in standard of education
of backward students of rural areas, was running a school and Commissioner had
not doubted genuineness of aims and objects of assessee, application u/s. 12A
could not be rejected merely on ground that secretary of society was getting
lease rent for land given to society for running school or his wife who had
requisite qualification was teaching in school and was being paid salary

The
assessee-society was a trust registered with the Registrar of Societies,
Haryana. The assessee-society was set up with various aims and objects
including improvement in the standard of education of the backward students of
rural areas. The assessee-society was running a school. It made an application
for registration u/s. 12A of the Act. During the proceedings, the Commissioner
was swayed by the fact that the secretary of the assessee-society was getting
lease rent of certain amount per annum for land given to society for running
school and wife of the secretary was teaching in school and getting salary from
the school. It was further stated that the assessee-society was not registered
under the New Haryana Registration & Regulation of Societies Registration
Act, 2012. Accordingly, the application was rejected.

On appeal, the
Tribunal ordered granting registration u/s. 12A to the society.

On appeal by the
Revenue, the Punjab and Harayana High Court upheld the decision of the Tribunal
and held as under:

“i)    The contentions raised by the revenue lacks
merit. There is no requirement u/s. 12A that the assessee-society is required
to be registered under the 2012 Act. Moreover, the assessee-society explained
before Tribunal that it had applied for registration under the 2012 Act but due
to back log, grant of registration was delayed. The certificate regarding
registration under 2012 Act was produced before the Tribunal.

ii)    The application u/s. 12A cannot be rejected
merely on the ground that the secretary of the society was getting lease rent
for the land given to the society for running the school or his wife who had
requisite qualification was teaching in the school and was being paid the
salary. It is not the case set up by the revenue that the exorbitant amounts
had been paid by the assessee-society to the secretary or to his wife. No
dispute has been raised to the fact that the assessee-society is running a
school as per its aims and objects.

iii)    The Commissioner while rejecting the
application has not doubted the genuineness of aims and objectives of the
assessee-society. On the other hand the Assessing Officer while finalising the
assessment for A. Y. 2010-11 u/s. 143(3) has specifically recorded the finding
that the income earned by the society has been utilised for educational
purposes.

iv)   The order of the ITAT warrants no
interference. No error has been pointed out in the findings recorded by the
ITAT much less shown to be perverse. No substantial question of law arises. The
appeal is, accordingly, dismissed.”