LAWS(KAR)-2012-7-393

DIRECTOR OF INCOME TAX Vs. VENKATESHA EDUCATION SOCIETY

Decided On July 10, 2012
DIRECTOR OF INCOME TAX Appellant
V/S
VENKATESHA EDUCATION SOCIETY Respondents

JUDGEMENT

(1.) APPEAL by the Revenue under Section 260-A of the Income Tax Act:, 1961 (the Act' for short). The Revenue is aggrieved by the order dated 28-1-2011 passed by the Appellate Tribunal allowing the appeal of the assessee and directing the Registering Authority to grant registration to the assessee under the provisions of Section 12-A of the Act which had been denied by the Registering Authority in terms of the order dated 26-7-2002.

(2.) THE assessee is a registered Society registered under the provisions of Mysore Registration of Societies Act and functioning since the year 1970 running several educational institutions. It appears, the assessee had claimed the benefit of exemption under Section 10(22) of the Act so long as the provisions was available on the statute/rules and after the deletion of Section 10(22) of the act w.e.f. 1-4-1999 by the Finance Act No.2/1998. The assessee has made efforts to retain the benefit of exemption in respect of its income under the provisions of Sections 11 and 12 of the act and for such purpose, it had made an application under Section 12-AA of the Act.

(3.) THE Registering Authority while examining one such application of the assessee found that the past manner of conduct of the assessee-Society was not very satisfactory; that the application of funds of the Society was not fully for the purpose of carrying on the activities of educational institutions run by the Society; that it was virtually being run as a family trust and funds of the Society was being used or misused for the benefit of the members of the family who are responsible for conducting the affairs of the Society, and therefore, the Society did not qualify for registration under Section 12-A of the Act.