Case Law Details
Sanatan Dharam Sabha Durga Bhawan Vs CIT (Exemption) (ITAT Delhi)
ITAT Held that at the stage of granting registration u/s. 12AA of Income Tax Act, 1961 CIT cannot examine whether the conditions for availing exemptions under Section 11 of the act are fulfilled or not.
Facts-
The assessee is a society registered with Registrar of Societies. Claiming that the objects of the society are of charitable and religious nature, assessee applied for registration under Section 12A of the Act. After considering the submissions of the applicant-society and material available on record, learned Commissioner of Income-Tax (Exemption) observed that assessee has transferred its funds to its sister concern, which could only have been done after grant of registration under Section 12AA of the Act. Further, he observed that assessee without any approval had wrongly claimed exemption under Section 10(23) (BBA) and 10(23C)(b). Further, he observed, on exemption of the accounts of assessee, it was found that assessee had invested an amount of Rs.66,04,782 in construction of new building. Whereas, the return of income filed by the assessee shows that the donation received were utilized for day to day affairs. Thus, according to him, the assessee could not explain the source of investment in construction of building. Learned CIT(Exemption) observed, even though, assessee has not been granted registration under Section 12AA of the Act, hence, not entitled for exemption under Section 11, however, it has shown corpus donation, which is against this statutory provision.
Conclusion-
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