2011 (6) TMI 764 - AT - Income Tax

Summary

Issues involved: Appeal against order of Commissioner of Income Tax cancelling registration under section 12AA for a trust engaged in publication and sale of literature related to Gandhian and Sarvodaya ideologies.

Summary:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax cancelling the registration under section 12AA. The assessee, a trust engaged in the publication and sale of Sarvodaya literature and Gandhian ideologies, argued that the activities were in line with the objects of the trust and genuine. The Commissioner had found that selling books was not a charitable activity, but there was no evidence that the trust was not genuine or deviating from its approved objects. The Income Tax Appellate Tribunal (ITAT) noted that the trust was solely involved in activities related to Gandhian and Sarvodaya ideologies, for which it was granted registration under section 12A in 1989. As there was no specific violation found, the ITAT held that the trust was entitled to continue its registration under section 12AA, reversing the Commissioner's order. Therefore, the appeal of the assessee was allowed, and the registration granted in 1989 was upheld.

The ITAT emphasized that under section 12AA(3) of the Income Tax Act, registration can be revoked if activities are not genuine or not in line with the trust's objects. Since there was no evidence of such violations and the trust was solely focused on spreading Gandhian and Sarvodaya ideologies, the cancellation of registration was deemed unjustified. The ITAT's decision reinstated the trust's registration under section 12AA, ensuring its continuation as per the order issued in 1989. The order in favor of the assessee was pronounced on 30/06/2011.