An image processing apparatus which is capable of easily determining, when a user causes the apparatus to scan a sheet original to carry out predetermined processing, whether or not the sheet original has been modified or edited from a document file as the source of the sheet original. A scanner section not only reads an original and generates original image data, but also recognizes information embedded in the original. Rights information concerning the original is acquired based on the information embedded in the original. A controller unit determines whether or not the original has been edited, and performs control based on contents of the rights information and a result of the determination, such that execution of processing, which is designated by a user, on the original image data is permitted or restricted.