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2014 (6) TMI 48 - HC - Income TaxRejection of application of exemption u/s 10(23C)(vi) of the Act Activities of the Society ceased to be charitable as defined u/s 2(15) r.w section 11and 13 of the Act Held that - Exemption u/s 10(23C)(vi) of the Act can be claimed by an assessee without applying for registration u/s 12A of the Act as it is not required to fulfil the conditions mentioned u/s 11 of the Act while claiming exemption u/s 10(23C) (vi) of the Act - the registration was cancelled only on the ground that the Society did not solely exist for charitable purpose - There is no whisper that the assessee did not fulfill any of the conditions mentioned in Section 12-AA(3) of the Act, namely, that the activities of such trust was not genuine or was not being carried out in accordance with the objects of the trust thus, there was no error in the order of the Tribunal and as such no substantial question of law arises for consideration Decided against Revenue.
Issues involved:
Appeal under Section 260-A of the Income-Tax Act regarding cancellation of registration under Section 12-AA(3) for exemption under Section 10 (23-C)(vi) of the Income Tax Act. Analysis: The case involved an appeal under Section 260-A of the Income-Tax Act concerning the cancellation of registration under Section 12-AA(3) for exemption under Section 10 (23-C)(vi) of the Income Tax Act. The Chief Commissioner of Income Tax rejected the assessee's application for exemption under Section 10 (23-C)(vi) for certain assessment years, leading to a notice for cancellation of registration under Section 12-AA(3). The Commissioner of Income Tax, Varanasi, canceled the registration citing that the activities of the Society were not entirely charitable as per the defined criteria. However, the Income Tax Tribunal later set aside this order and granted registration under Section 12-AA to the assessee. The department then filed the present appeal challenging this decision. The crux of the matter lay in the interpretation of Section 12-AA of the Act, which outlines the procedure for registration and cancellation of registration of trusts or institutions. The section empowers the Commissioner to cancel registration if the activities of the trust are not genuine or not in accordance with the trust's objects. In this case, the trust's objects included providing education to Christian youth, religious teachings, and worship in line with the Catholic Church's beliefs. The Commissioner was required to ensure the genuineness of the trust's activities before granting or refusing registration. The Court emphasized that the cancellation of registration under Section 12-AA was distinct from granting or refusing exemption under Section 10 (23-C) of the Act. The Court noted that while some activities of the trust may not be solely charitable, this could not be a ground for canceling registration under Section 12-AA. The Court differentiated this case from previous judgments related to exemption under Section 10 (23-C) and highlighted the importance of fulfilling the conditions specified in Section 12-AA(3) for registration. In aligning with a previous decision, the Court held that the registration was canceled solely on the grounds that the Society did not exclusively exist for charitable purposes, without any indication of non-compliance with Section 12-AA(3) conditions. Consequently, the Court found no error in the Tribunal's decision and concluded that no substantial question of law arose in the appeal. As a result, the appeal was dismissed at the admission stage. In conclusion, the judgment addressed the nuances of registration and cancellation under Section 12-AA of the Income Tax Act, emphasizing the importance of genuineness of activities and adherence to trust objects for maintaining registration status, distinct from considerations for exemption under Section 10 (23-C).
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