2011 (4) TMI 1357 - AT - Income Tax

Summary

Issues involved:
The cancellation of registration granted to the assessee u/s.12A of the I.T. Act by the Director of Income Tax (Exemption), Mumbai based on the grounds of not carrying out activities in accordance with the trust's objects.

Cancellation of Registration u/s.12A:
The appeal was filed by the assessee challenging the cancellation of registration u/s.12A of the I.T. Act by the Director of Income Tax (Exemption), Mumbai. The grounds of appeal included the contention that the cancellation was erroneous and that the trust's activities were indeed charitable. The assessee trust, registered under the Bombay Public Trusts Act, had its registration cancelled due to spending on medical relief not covered by the trust's objects as specified by the City Civil Court in a scheme. The Director of Income Tax concluded that the trust's activities were in violation of the court's order and hence cancelled the registration u/s.12A.

Amendment to Section 12A and Decision:
The Tribunal considered the amendment to sub-section 3 of section 12A by the Finance Act, 2010, granting the Director of Income Tax the power to cancel registrations u/s.12A from 01.06.2010 onwards. As the cancellation in this case was dated 07.09.2009, the Tribunal held that the Director had no authority to cancel the registration at that time. Therefore, the Tribunal deemed the cancellation order as invalid and cancelled it, allowing the assessee's appeal.