short issue that we are required to adjudicate in this appeal is whether or not CIT-III, Pune was justified in declining to renew approval under s. 80G of IT Act, 1961 (hereinafter referred to as Act ), for asst. yr. 2006-07 onwards. assessee is society registered under Societies Registration Act, 1860 and Bombay Trusts Act, 1950. assessee is one of oldest educational institution in city was established in year 1888 which was set up 120 years ago, main objective of society was stated to impart education in vernacular language and to educate students about their duties to society, self respect, self reliance and duties towards our nation. As on now, it has established and it runs several educational institutions at different places. When assessee sought renewal of approval under s. 80G, vide application in Form 10G received by CIT s office on 9th Feb., 2007, assessee was issued questionnaire calling upon assessee to furnish certain documents, information and clarification. This requisition was duly complied with. In course of ensuing hearing on renewal application, CIT noted that, in terms of findings of AO for asst. yrs. 2003-04 and 2004-05, there are certain irregularities as also contravention with rules in three out of 57 institutions of following nature: Action of applicant society in making collection over and above prescribed fees; Maintaining accounts in respect of such unauthorized collections separately, viz. under miscellaneous account, and taking it directly to balance sheet without admitting it as income; Collecting from students contribution to development fund which, considering same are over and above normal fees are in nature of capitation fees; Taking such development funds directly to balance sheet without routing same through P&L a/c; Treat donations which have not been specifically given towards corpus donation as corpus donation and thus not showing such donations as income, where same should have been so shown as per provisions of s. 12(1). It was in this backdrop that CIT required assessee applicant to show cause as to why, in view of above findings against assessee in assessment orders for asst. yrs. 2003-04 and 2004-05 and in view of fact that there has been denial of complete exemption under ss. 11 and 12, assessee should not be deemed to be not complying with provisions of s. 80G(5)(i). It was explained by assessee that denial of exemption under s. 11 was in respect of three institutions only; and that, in any event, assessment orders so passed have been carried in appeal before CIT(A). It was also submitted that surplus of these three institutions was used only to make good shortfall in other institutions, and as such surplus was used for purposes of attaining objectives of trust and not for any business purposes. These submissions did not impress learned CIT, who was of view that even such part denial of exemption amounts to non-fulfilment of conditions and that taxable unit being assessee applicant, and not individual institutions functioning under assessee applicant, it is not really material whether or not alleged violation is only in respect of three institutions. On basis of this reasoning and taking note of findings of AO in asst. yrs. 2003-04 and 2004-05, CIT rejected renewal application. assessee applicant is aggrieved and is in appeal before us. We have heard rival contentions, perused material on record and duly considered factual matrix of case as also applicable legal position. To properly adjudicate issue in appeal, it is necessary to first appreciate scheme of Act, so far as approval under s. 80G is concerned. Sec. 80G(2)(a)(iv) provides that in computing total income of assessee, in accordance with provisions of said section, there shall be deducted, amount equivalent to fifty per cent of any sum paid by assessee in previous year, as donation, to any fund or any institution, other than ones specified in s. 80G, to which this section applies. Sec. 80G(5)(vi) provides that, in order to be eligible for deduction under s. 80G(2)(a)(iv), institution or fund to which amount is paid as donation, "is for time being approved by CIT in accordance with rules framed in this behalf". Rule 11AA of IT Rules provides for requirements for approval of any institution or fund under s. 80G. institution or fund seeking approval under s. 80G is to move application to CIT concerned, in. prescribed proforma and along with copy of (i) registration granted under s. 12A or copy of notification issued under s. 10(23) or s. 10(23C); (ii) notes on activities of institution or fund for last three years or since inception. whichever is less, and (iii) copies of accounts of institution or fund for last three years or since inception, whichever is less. CIT is also empowered to call for further documents or information from trust or institution, or cause such enquiries to be made, as he deems fit, in order to satisfy himself about genuineness of activities of such trust or institution. Where CIT is satisfied that all conditions laid down in cls. (i) to (v) of s. 80G(5) are fulfilled by applicant trust or institution, CIT is to grant approval specifying year or years for which such approval is valid. In case CIT is not satisfied about these conditions being satisfied, he shall reject application for approval, after recording reasons for such rejection in writing. provisions of s. 80G(5)(i) to (v), on basis of which CIT has to grant or reject application seeking approval under s. 80G, are as follows: "(i) where institution or fund derives any income, such income would not be liable to inclusion in its total income under any of provisions of ss. 11 and 12 or cl. (23AA) or cl. (23C) of s. 10; Provided ......................... (not relevant for our purposes) (ii) instrument under which institution or fund is constituted does not, or rules governing institution or fund do not, contain any provision for transfer or application at any time of whole or any part of income or assets of institution or fund for any purpose other than charitable purposes; (iii) institution or fund is not expressed to be for benefit of any particular religious community or caste; (iv) institution or fund maintains regular accounts of its receipts and expenditure; and (v) institution or fund is either constituted as public charitable trust or is registered under Societies Registration Act, 1860, or any law corresponding to that Act in force in any part of India or under s. 25 of Companies Act, 1956 or is university established by law, or is any other educational institution recognized by Government or by university established by law, or affiliated to any university established by law, or is institution financed wholly or in part by Government or local authority." plain look at provisions of s. 80G of IT Act, r/w r. 11AA of IT Rules, thus makes it clear that decision on whether to grant or not grant approval under s. 80G essentially rests on CIT s satisfaction that above five conditions are satisfied by applicant. Each case must, therefore, be examined on touchstone of above five tests which are fairly objective and unambiguous. We also find that under r. 11AA(3), CIT has powers to call for such further information and documents, and to have such enquiries conducted, as he considers appropriate to satisfy himself about genuineness of activities of trust or institution , but then there is no further elaboration about connotations of expression genuineness in this context, nor does that criterion find any place in test on which CIT must satisfy himself before granting approval under s. 80G. At this stage, we may take note of order dt. 6th Aug., 2007 issued by Chief CIT-II Pune granting exemption under s. 10(23C) to assessee applicant, from asst. yrs. 2006-07 onwards. This document was filed before us as additional evidence as assessee received above notification after proceedings before CIT were already concluded. Having heard parties on petition seeking admission of this additional evidence, we deem it fit and proper to admit same. By way this notification, exemption under s. 10(23C) is granted on following conditions: (i) assessee will apply its income or accumulate for application, wholly and exclusively to objects for which it is established; (ii) assessee will not invest or deposit its funds (other than voluntary contributions received and maintained in form of jewellery, furniture, etc.) otherwise than in any one or more of forms or modes specified in sub-s. (5) of s. 11; (iii) This notification will not apply in relation to any income being profits and gains of business, unless business is incidental to attainment of objectives of assessee and separate books of accounts are maintained in respect of such business; (iv) assessee will regularly file its return of income before IT authority in accordance with provisions of IT Act, 1961; (v) In event of dissolution, its surplus assets will be given to organization with similar objectives and no part of same will go to any of members of this institution. One of contentions canvassed before us is that now that assessee i s eligible for exemption under s. 10(23C), very foundation of rejection order ceases to exist, and there is, therefore, no good reason for declining approval under s. 80G. opposition to this contention is, inter alia, on grounds (a) that grant of exemption is conditional and assessee s conduct does not inspire that he will scrupulously comply with these conditions; (b) that, as evident from findings of AO, assessee is not carrying out any genuine charitable activities, (c) that educational facilities by assessee are extended on commercial lines by charging excessive fees and by charging capitation fees, and, as such, assessee is not engaged in any charitable activities; (d) that unless assessee is able to establish that genuine chartable activities are carried out, approval under s. 80G cannot be granted; (e) that accounts maintained by assessee are not correct since, as pointed out by AO, certain receipts are taken directly to balance sheet without routing same through P&L a/c; and (f) that assessee has contravened rules by way of charging excessive fees. Learned counsel (argued) that these submissions are factually incorrect and legally invalid. He elaborately takes us through various documents to demonstrate that allegations of AO are factually incorrect, and, in process of doing so, he takes up each objection of AO in asst. yrs. 2003-04 and 2004-05 and makes effort to show fallacies inherent in such objections and incorrect assumption of material facts. For reasons we will set out little later, we are not inclined to address ourselves to these factual aspects in greater detail. other plea of learned counsel is that all that is required to be seen by CIT is whether or not conditions set out in s. 80G(5)(i) to (v) are satisfied, and once objective tests contemplated in these provisions are satisfied, it is not open to CIT to decline approval under s. 80G on basis of his subjective perceptions about genuineness of charitable activities or on basis of his apprehensions about possible non-fulfilment of conditions subject to which exemption from income if granted. In our considered view, for purpose of deciding on whether or not to grant approval under s. 80G, CIT has to only examine whether or not conditions set out in s. 80G(5)(i) to (v) are satisfied. first and foremost thing to be seen is whether or not any income earned by assessee is not being liable to inclusion in its total income under any of provisions of ss. 11 and 12 or cl. (23AA) or cl. (23C) of s. 10. It has to be borne in mind that since assessee is granted approval for future years, and since there is no way that anyone can have clairvoyance of knowing whether or not assessee will be able eventually to comply with conditions, if any attached to exemptions, as long as exemption is available in principle and as long as assessee can reasonably claim to be able to satisfy conditions attached to such exemption, one has to proceed on basis that condition laid down under s. 80G(5)(i) is satisfied. It cannot (be) open to CIT to reject approval under s. 80G only on ground that it is not conclusively established now that assessee will be finally eligible in future for exemption under ss. 11, 12 and 10(23AA) or 10(23C). Such interpretation can only lead to absurdity that in year x, assessee must have finding about applicability for exemption in years x+1, x+2, x+3 and so on particularly when even eligibility for exemption is dependent on conduct of assessee, such as filing of return and maintenance of books of accounts, in years x+1, x+2, x+3 and so on. In principle eligibility for exemption, and existence of conditions, if any, attached to exemption, which can be reasonably complied with in our considered view, sufficient to satisfy s. 80G(5)(i). That condition is satisfied on facts of this case. next thing to be ensured by CIT is non-existence, in instrument, constitution or rules governing institution, of any provision for transfer or application at any time of whole or any part of income or assets of institution or fund for any purposes other than charitable purposes. That can of course be done by examining provisions in instruments and rules of institution. assessee had duly furnished documents to CIT, and no such discrepancy is noted therein. provision of s. 80G(5)(iii) is also thus satisfied. next thing to be ensured is that institution or fund is not expressed to be for benefit of any particular religious community or caste. That is also not case before us, and there is no dispute on that aspect. As regards requirements of s. 80G(5)(iv), all that is to be seen is that assessee maintains accounts of its receipts and expenditure. discrepancies pointed out by Departmental Representative in wrong accounting treatment to receipts by taking same directly to balance sheet are not really relevant in this context, because all that law requires is that accounts of receipts and expenditure be maintained by assessee. correctness of fine issue in accounting treatment are not covered by scope of s. 80G(5)(iv). accounts having been regularly maintained by assessee, it cannot even be case of CIT that assessee is wanting in this respect. Finally, in terms of provisions of s. 80G(5)(v), CIT has to ensure that assessee institution or fund has nature of one of organizations specified in that clause. societies registered under Societies Registration Act, 1960, as admittedly assessee is, are one such form of organization. This condition is also therefore satisfied. In course of hearing before us, there was good deal of discussion on objections raised by AO in course of asst. yrs. 2003- 04 and 2004-05 and arguments on merits were advanced by both sides. However, as learned CIT(A) is in seisin of matter, we refrain from making any specific observations on these aspects. Suffice to say that prima facie correctness of findings of AO cannot be said to be entirely free from doubt and, in any event, these findings at best challenge assessee s compliance with certain rule and procedures which do not, in any way, challenge fact charitable activities actually having been carried out. Therefore, based on these findings, one cannot come to conclusion that charitable activities of assessee society were not genuine in any event, as we have stated earlier as well, all that learned CIT has to see, for purpose of deciding whether or not approval is to be granted for purpose of s. 80G is whether or not conditions of s. 80G(5)(i) to (v) are satisfied, and, as per mandate of r. 11AA(4), once these conditions are satisfied, he has to grant approval. Genuineness of charitable activity, in absence of any specific mention about connotations of that expression in IT Act or IT Rules, must remain confined to aspect that charitable activities are actually carried out by assessee. accounting treatment of receipt and fixation of fees in excess of norms laid down by controlling bodies, even if that be so do not decide genuineness of activities of trust or institution. In view of above discussions, in our considered view, effectively all necessary requirements under r. 11AA(4) are satisfied and CIT ought to have granted approval under s. 80G(2)(iv). We, therefore, uphold grievance of assessee and accordingly direct CIT to grant approval under s. 80G. In result, appeal is allowed. *** SHIKSHAN PRASARAK MANDALI v. COMMISSIONER OF INCOME TAX