2017 (9) TMI 973 - HC - Income Tax

Renewal of approval under Section 80G denied - cancelling the registration under Section 12A - proof of charitable activities - Held that - Once the Tribunal has followed the orders on facts for the prior assessment years and on both counts agreed with the assessee that there is no violation of the Capitation Fee Act, nor the institutions are carrying on their activities on commercial lines, then, we do not think that the Commissioner was justified in cancelling the registration under Section 12A of the IT Act. His order has been rightly interfered with. Even in the case of renewal of approval under Section 80G of the IT Act, the Tribunal found that the same observations have been made. Rather, the Commissioner relied upon the cancellation of registration under Section 12A of the IT Act. The Tribunal concluded that once it has assigned cogent and satisfactory reasons for restoring registration under Section 12A, there was no justification for not renewing approval under Section 80G(5) Clause (vi) of the IT Act. These are all factual findings and based on materials on record. We do not think that the appreciation and appraisal of the factual materials by the Tribunal is perverse or vitiated by any error of law apparent on the face on record. - Decided in favour of assessee.

Summary

Issues:
1. Appeal challenging the order of the Income Tax Appellate Tribunal regarding renewal of approval under Section 80G of the Income Tax Act.
2. Appeal against the cancellation of registration under Section 12A of the Income Tax Act.

Analysis:
1. The first issue involves the rejection of renewal of approval under Section 80G of the Income Tax Act and the subsequent appeal. The Tribunal allowed the appeal filed by the assessee after considering detailed facts. The Revenue contended that the Tribunal had no justification for allowing the appeals. The respondent, a society registered under specific acts, applied for renewal of approval under Section 80G, which was rejected by the Commissioner. The Tribunal upheld the order based on the non-satisfaction of certain clauses, leading to the cancellation of registration under Section 12A. The court found that the Tribunal's decision was based on factual findings and materials on record, not vitiated by any legal errors.

2. The second issue pertains to the cancellation of registration under Section 12A and the subsequent appeal. The Commissioner canceled the registration based on certain collections termed as donations from students, alleging violations of the Capitation Fee Act. However, the Tribunal found no merit in the Commissioner's findings. It noted that the surplus accumulated by the trust was within permissible limits and that the institution was not operating on commercial lines. The Tribunal's decision was supported by prior observations in the assessee's case for earlier assessment years. The court concurred with the Tribunal's reasoning, stating that the cancellation of registration was unjustified. The Tribunal also found no justification for not renewing approval under Section 80G after restoring registration under Section 12A, based on cogent reasons and factual findings.

In conclusion, the High Court dismissed the appeal, emphasizing that no substantial question of law arose from the Tribunal's order. The decision was based on a thorough evaluation of factual materials and was not tainted by legal errors.