12AA application cannot be rejected by casting aspersions on the genuineness of the objects without any adverse findings: Delhi HC

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12AA application cannot be rejected by casting aspersions on the genuineness of the objects without any adverse findings: Delhi HC

Mata Parvati Educational and Innovative Society (ITA 119/2020 & CM APPL. 6637/2020)

Facts:

  1. The assessee society is engaged in activities of imparting education by running school in the name and style of Rainbow Kids Valley School. It filed an application in Form 10A for registration under section 12AA of the Income-tax Act, 1961 as a charitable trust.
  1. The application was rejected on the grounds that there is huge amount of cash deposits in the bank account; assessee has failed to file the complete details of cash deposit in the banks account; that the school being run by the assessee is not even recognised by the Government of NCT of Delhi; and that the assessee has failed to satisfactorily establish the genuineness of the conduct of the charitable activities as defined in section 215 of the Act.

Hon Delhi HC held as below:

  1. There is no dispute raised that the Assessee is in fact running the Rainbow Kids Valley School.
  1. Further, the learned counsel for the Respondent confirmed on written instructions that no scrutiny assessment was made in the case of the Respondent, Assessee, for Assessment Year (AY) 2017-18, when the cash deposits were made in the bank account of the Respondent, Assessee.
  1. There is, therefore, no adverse finding of the AO against the Assessee with respect to the said cash deposits.
  1. The scope of the application was to examine the genuineness of the objects of the society and to ascertain if the said objects are charitable or not. Learned senior standing counsel for Revenue, has failed to show any infirmity in the findings of the ITAT which hold that the objects of the Assessee are charitable.

5 So registration be granted to the Assessee.

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