2012 (2) TMI 664 - AT - Income Tax

Summary

Issues involved:
The cancellation of registration granted to the assessee-trust u/s 12A of the Income Tax Act by the ld. C.I.T. invoking provisions of sec. 12AA(3) of the Act.

Issue 1: Observations of CIT regarding genuineness of activities of the trust

The assessee appealed against the order of the ld. C.I.T. canceling the registration granted to the appellant trust u/s 12A of the Income Tax Act. The grounds raised included the contention that the activities of the trust were genuine and in accordance with the trust's objects. The ld. C.I.T. erred in not considering the facts of the case properly and in canceling the registration based on observations that the activities were not genuine.

Issue 2: Authority to cancel registration granted u/s 12A

The appellant argued that the ld. C.I.T. did not have the authority to cancel the registration granted u/s 12A of the Act. The appellant contended that the amendment in sec. 12AA(3) of the Act, giving authority to cancel registration, was not applicable in this case. The appellant relied on legal decisions to support this argument.

Issue 3: Interpretation of sec. 12AA(3) and sec. 12A

The Tribunal analyzed the provisions of sec. 12AA(3) and sec. 12A of the Act. It was observed that sec. 12AA(3) empowers the ld. C.I.T. to cancel registration granted under specific clauses. The Tribunal concluded that the registration granted u/s 12A of the Act cannot be withdrawn or canceled by the ld. C.I.T. by invoking the provisions of sec. 12AA(3) of the Act. Legal precedents were cited to support this interpretation.

Decision:
The Tribunal held that the cancellation of registration by the ld. C.I.T. was not in accordance with the law. Citing legal interpretations and precedents, the Tribunal vacated the impugned order of the ld. C.I.T. dated 22/06/2010, thereby restoring the registration granted to the assessee-trust u/s 12A of the Act. The appeal of the assessee was allowed.