The Tax Publishers2020 TaxPub(DT) 0286 (Jp-Trib)

INCOME TAX ACT, 1961

Section 12AA(4)

Scholarship had been paid to regular students who were enrolled in various courses conducted by educational institutions run by assessee society. Criteria for such scholarship was well laid down in terms of economic condition of students and their parents, past academic results, etc and there was a well laid down process for seeking application from students and after due verification and approval from the Head of the educational institution, scholarship payments were sanctioned and subsequently disbursed to the students. The payments had been made through account payee cheques and there was nothing on record to remotely suggest that amount claimed by assessee society as scholarship expenses had reached back in the hands of assessee society and it had misused such funds. Accordingly, there was no basis to hold that assessee society made misuse of society funds in guise of scholarship payments and therefore, withdrawal of registration under section 12AA was not justified.

Charitable trust - Withdrawal of registration under section 12AA - Reason, allegation of misuse of society funds in guise of scholarship payments - Scholarship payments found to be genuine

Assessee was an educational society registered under section 12AA. Pr. CIT withdrew registration under section 12AA on the ground of alleged misuse of soceity funds in guise of scholarship payments.Held: Scholarship had been paid to regular students who were enrolled in various courses conducted by educational institutions run by assessee society. Criteria for such scholarship was well laid down in terms of economic condition of students and their parents, past academic results, etc and there was a well laid down process for seeking application from students and after due verification and approval from the Head of educational institution, scholarship payments were sanctioned and subsequently disbursed to the students. The payments had been made through account payee cheques and there was nothing on record to remotely suggest that amount claimed by assessee society as scholarship expenses had reached back in the hands of assessee society and it had misused such funds. Accordingly, there was no basis to hold that assessee society made misuse of society funds in guise of scholarship payments and therefore, withdrawal of registration under section 12AA was not justified.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15 to 2017-18

INCOME TAX ACT, 1961

Section 11(6)

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT