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2017 (9) TMI 970 - HC - Income TaxCancelling registration and exemption granted u/s 12AA - refusing to register assessee s establishment as a trust - Held that - The issue has been decided by a co-ordinate Bench of this Court 2016 (12) TMI 247 - PATNA HIGH COURT held in view the decision in Dawoodi Bohra s case 2014 (3) TMI 652 - SUPREME COURT which squarely applies to the case of the petitioners, rather their case stands on a higher footing as they have established institutions which are created for the benefit of all sections of society and the religious activities carried out by them are minuscule in comparison to their main activity. Even the rule of 5% would apply only with regard to exemption under Section 80G and not with regard to the registration under Section 12AA or the cancellation thereof. This Court is, therefore, of the view that the order dated 28.11.2012 of the CIT-1, Patna cancelling the registration of Imarat Shariah Trust under Section 12AA is contrary to law. Once it has been held by a Co-ordinate Bench of this Court that the petitioner-trust is entitled to registration under Section 12AA of the Act and the cancellation on the grounds as mentioned therein and reproduced hereinabove are not correct, we find that the order passed impugned in this writ petition is liable to be quashed and the writ petition allowed in favour of assessee.
Issues:
Challenge to cancellation of registration and exemption under Section 12AA of the Income Tax Act, 1961. Analysis: The judgment dealt with a writ petition challenging the order cancelling the registration and exemption granted to the petitioner-trust under Section 12AA of the Income Tax Act, 1961. The Revenue raised a preliminary objection stating that a statutory remedy of appeal was available against the impugned order. However, the court noted that a similar issue regarding the petitioner's registration under Section 12AA had been previously considered in another case. In that case, the court had decided in favor of the petitioner based on the law laid down by the Supreme Court in a specific case. The court emphasized that the petitioner's activities were primarily for the benefit of society, with religious activities being secondary. As a result, the court found the cancellation of registration to be contrary to law. The court held that since a co-ordinate Bench had already decided in favor of the petitioner regarding registration under Section 12AA, the impugned order from 2014 was liable to be quashed. The court did not see the need to refer the petitioner to the statutory remedy available, as the issue had already been decided in favor of the petitioner in their previous writ petition. Therefore, the court allowed the writ petition and quashed the impugned order, upholding the petitioner's entitlement to registration under Section 12AA of the Income Tax Act, 1961. In conclusion, the judgment provided a detailed analysis of the grounds for challenging the cancellation of registration and exemption under Section 12AA of the Income Tax Act, 1961. It emphasized the importance of the nature of the petitioner's activities and how they aligned with the requirements for registration as a charitable trust. The court's decision was based on previous legal precedents and a thorough examination of the facts and arguments presented in the case.
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