1. This appeal arises out of the order of the Commissioner of Income-tax (CIT), Ghaziabad, passed under Section 12AA of the IT Act, 1961 on 22nd July, 2002, in which registration was refused to the assessee-society. Before him, it was inter alia pointed out that the assessee is a society registered under the Societies Registration Act, and it is establishing Shavak National School, which will be 10+2 standard school to cater to the needs of people in Noida and Greater Noida. The school will provide good education coupled with extra curricular activities for the pupil. For this purpose, land has already been allotted to the society and building plan has been submitted to the advisory board of the society. It was claimed that education is a charitable purpose and, therefore, it should be registered under the IT Act.
1.2 The learned CIT referred to the definition of the expression "charitable purpose" in Section 2(15) of the Act and mentioned that it was mandatory that the object should be to give relief to the poor.
However, in the instant case, the school caters to the needs of the people belonging to higher strata of the society and charges high fees.
Thus, he was of the view that even while imparting education, the society does not grant any relief to the poor. Accordingly, it was held that the society is not pursuing any charitable object.
2.1 Before us, the learned Counsel of the assessee drew our attention towards object Clause 4 of the amended memorandum of the society. The main object is to advance, promote and disseminate amongst the students the study of education of all kinds of subjects including literary, commercial and religious subject. The other objects are ancillary in nature, such as, to establish, maintain schools and colleges, etc.; to grant scholarships to deserving students; to cultivate feeling of Indians, nationalism and co-operative feeling etc. amongst the students; and to conduct experiments with a view to improve methods of imparting education. The learned Counsel pointed out that these objects are in the field of education, which is per se a charitable object. The learned Counsel also referred to Clause 17 of the rules and regulations, according to which, in the event of dissolution, the funds of the society shall devolve on any other association having similar objects. It was also pointed out that there is no provision for distribution of profit amongst members in the rules and regulations.
Thus, it was contended that the society does not exist for profit.
2.2 As against the aforesaid, the learned Departmental Representative pointed out that main object of the society was to impart education. In view thereof, there was need for it to seek registration under the IT Act, as its income was exempt under Section 10(23C).
3. We have considered the facts of the case and rival submissions.
Section 2(15) defines the term 'charitable purpose' in an inclusive manner and includes within its ambit relief of poor, education, medical relief and advancement of any other object of general public utility.
While, there could be some dispute in interpretation of the words "any other object of general public utility", there is no dispute that education per se is a charitable purpose just like relief of poor or medical relief. The society also does not exist for profit as there is no clause for distribution of profits or net assets in case of dissolution to members. The precondition for grant of registration under Section 12AA is that objects are charitable in nature and activities are genuine. We have seen that objects are charitable. The society is trying to set up a school in pursuance of its main object, which is a genuine activity. The learned CIT has also not referred to any material to show that the activities are not genuine. It is no doubt true that income of the society can also be exempted under Section 10(23C), but when two recourses are available to a person under the law, it is for him to choose one, the other or both the recourses.
The assessee applied for its registration, to which it was entitled. We are of the view that under the circumstances, it has to be registered.
The learned CIT is directed to grant registration to the society.