CIT(E) rejected the 12A registration on the ground that clause mentioned in the gift deed is not in accordance with law is concerned; we find that the above reason given by the ld.CIT(E) is not correct in rejecting the 12A registration to the assessee. Further, the ld.CIT(E) not at all examined what the assessee's activities whether assessee actually carrying charitable activities are not. Without doing so, the ld. CIT(E) picked up an irrelevant clause in the gift deed and rejected 12A, in our opinion ld. CIT(A) is not correct. We, therefore, granting 12A to the assessee. Ordered accordingly.
7. In the result, appeal filed by the assessee is allowed.
Sec. 11 of Income Tax Act, 1961— Exemption - The assessee-society is running an old age home in 03 acres of land situated in Vizianagaram. The ITO(E), submitted his report to the CIT(DR) which reveals that the main activities of “Prema samajam? is to provide shelter and food for destitutes who are above 50 years of age. At present, there are around 50 destitutes taking shelter in it. Apart from this, the assessee is providing paying guest accommodation for the needy. Paying guest accommodation is said to be provided to those who are admitted by their kids or nearby relatives. The expenditure for running the organization is from interest income earned on bank deposits held by it. The deposits held by the organization are said to be out of funds donated by the public. Ultimately all the funds are used for the benefit of the people who are admitted in the society, no profit making activity is carried out by the assessee. Thus, the assessee is running its society in charitable lines and is deserves to be granted registration u/sec. 12A of the Act. - PREMA SAMAJAM V/s ITO -  23 ITCD Online 131 (ITAT-VISAKHAPATNAM)