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TMI Blog2012 (5) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... y set up under the Maharashtra Housing and Area Development Act, 1976. The assessee was granted registration u/s.12A of the Act w.e.f. 01-04-2002. Sec.2(15) of the Income Tax Act, 1961 (the Act) defines Charitable purpose to include relief of the poor, education, medical relief and the advancement of any other object of general public utility. Section 2(15) of the Act was amended by the Finance Act 2008 w.e.f. 01-04-2009 whereby a proviso to the definition of 'charitable purpose' was inserted. According to the proviso, the advancement of any other object of general public utility which falls within the definition of 'charitable purpose' will not be regarded as 'charitable purpose' if it involves the carrying on of any activity in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er additions while determining total income of the Assessee. The assessee has filed an appeal before the CIT(A) against the above assessment order and the same is pending. The outstanding demand the recovery of which is sought to be stayed in the present application arises out of the order of the order of assessment dt. 27.12.2011 for AY 09-10. 4.1 The first question that would fall for consideration is as to whether in the appeal filed against the order passed u/s.12AA(3) of the Act cancelling registration granted u/s.12A of the Act to the assessee, the assessee can seek a prayer for grant of order of stay of recovery of the outstanding demand arising in assessment year 2009-10 out of the order of assessment passed by the AO for assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201 is an adjunct to sub-s. (1) and is in that sense closely related. One cannot conceived of a situation where the assessee is deemed to be in default by an order under sub-s. (1) but no interest is charged on him under sub-s. (1A). It is possible to take the view that an order charging interest under sub-s. (1A) of s. 201 is part of the order deeming the assessee to be in default passed under sub-s. (1) thereof, though technically two separate orders are passed in a given case. It would be anomalous to allow the interest charged under s. 201(1A) to be recovered even when the assessee's appeal against the order under s. 201(1) declaring it to be in default is pending in appeal before the Tribunal. That would render the appeal before the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the direct outcome of the order passed u/s.12AA(3) of the Act cancelling the registration granted to the assessee u/s.12A of the Act. Thus, the outstanding demand for assessment year 2009-10 is related to the appeal filed by the assessee before the Tribunal challenging the validity of the order passed u/s.12AA(3) of the Act. Following the aforesaid decision of the Tribunal, we hold that the present application is maintainable. 6. The next aspect which needs to be seen is with regard to the existence of a prima facie case, balance of convenience and hardship. On this aspect, we have heard the rival submissions. We find that by the order dated 22-12-2011 passed u/s.12AA(3) of the Act, the DIT(E) has exercised the power to cancel registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble opportunity of being heard." 8. The power to cancel registration already granted can be done in two situations; (a) Satisfaction of the Commissioner that the activities of the trust or institution are not genuine (b) satisfaction of the Commissioner that the activities of the trust or institution are not being carried out in accordance with the object of the trust or institution." 9. It is also seen from the preamble to the Maharashtra Housing and Area Development Act, 1976, that the objects of the assessee are in furtherance of the obligation of the State under Articles 38 & 39 of the Constitution of India. This aspect has also been made clear in sec. 1A of the said Act. Section 37 of the said Act also provides that all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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