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TMI Blog2010 (8) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of section 12AA. As per the provisions of sub-section (3) of section 12AA, the CIT should be satisfied that the activities of the assessee society are not genuine or are not being carried on in accordance with the objects of the society and only then the CIT has power to cancel the registration granted to the assessee society. In our considered view, cancellation/withdrawal of registration by the learned CIT amounts to reviewing its earlier order. Hence, the impugned order passed u/s12AA(3) is illegal and unsustainable. In view of the above, we set aside the order of the learned CIT passed u/s 12AA(3) of the Act and allow the appeal of the assessee. In the result, the appeal is allowed. - H.L. KARWA AND N.K. SAINI, JJ. Ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the society is enumerated as under : ( iii )To establish hostels, cafeteria, Ran-basera, stores to provide accommodation and other facilities for persons in need. 3. This clause is not in nature of charity as defined in Income-tax Act, 1961 and not of general public utility and this activity of the society is related to profit generation. In the light of the above, you are required to show-cause why the registration under section 12A of the Income-tax Act, 1961 to your society should not be withdrawn. 4. In this connection, I am directed to request you to appear before learned CIT-II, Lucknow in his office at 5, Ashok Marg, Lucknow on 12th March, 2010 at 11.30 a.m." 3. In response to above notice, the assessee submitted its r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned above." 5. Shri Abhinav Mehrotra, chartered accountant, learned counsel for the assessee vehemently argued that the learned CIT was not justified in cancelling the registration granted to the assessee society without concluding proper inferences and appreciating the objects of the assessee society. While doing so, the learned CIT has ignored to apply and follow the uniform judicial interpretation rendered by superior Courts laying down the principles for applicability and invocation of provisions of section 12AA(3) of the Act. Shri Abhinav Mehrotra, learned counsel for the assessee also submitted that the impugned order has been passed by the learned CIT without application of independent mind and is based on the findings of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials available on record. It is observed that the society commenced its activities since December, 2005 with the main object to establish schools, educational, professional, technical, non-technical camps, schools and colleges whether residential or non-residential to raise and uplift the intellectual status of masses with or without the help of Government or other institutions in all areas rural or urban. For the purpose of attainment of main objects, the society decided to establish a law college at Barabanki. During 2006-07, the society was granted affiliation by Dr. Ram Manohar Lohia Awadh University and for that purpose the society got constructed the building and purchased furniture, generator and books. After getting approval from Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s obtained registration at any time under section 12A as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently the CIT is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution." From the above section, it is clear that registration granted to any trust or society under section 12AA(1)( b ) of the Act can be cancelled/withdrawn subsequently if the CIT is satisfied that the activities of such trust or institution were not genuine or are not being carried out in accordance with the obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Therefore, having once granted the approval, the prescribed authority becomes functus officio for that particular period. Though the above case relates to continuation of the approval and exemption under section 35(1)( ii ) of the Act, still the ratio laid down by the Hon ble jurisdictional High Court in the case of K.M. Scientific Research Centre ( supra ) is squarely applicable to the facts of the present case. In view of the ratio laid down by the Hon ble jurisdictional High Court in the case of K.M. Scientific Research Centre ( supra ), we are of the view that the cancellation of registration by the learned CIT amounts to reviewing its earlier order passed under section 12AA(1)( b )( i ) of the Act. Under the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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