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TMI Blog2013 (11) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... and tenancy receipts. It applied for, and was granted registration u/s. 12A of the Act on 24.2.2003 w.e.f. 1.4.2002. Subsequently there was an amendment in the Act by way of substitution of section 2(15) of the Finance Act, 2008 w.e.f. 1.4.2009; the new section reading as under:- "2(15) 'charitable purpose' includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: A second proviso to the provision was inserted by the Finance Act, 2010 with retrospective effect from 1.4.2009, which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) ............. (2) ................ (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has 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 Commissioner 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner, is empowered to cancel the registration granted either u/s. 12A or u/s. 12AA at any time. 5.2 The assessee's objection to the registration being withdrawn from an anterior date stands again answered by the hon'ble court; this aspect also obtaining in the facts of the case before it. It stands clarified by it that a provision is retrospective when it takes away a right which has vested or accrued in the past; and not merely when it operates to events that have occurred in the past. In fact, as we shall presently see, and is also one of the assessee's principal arguments, that there has been no change in its activities since incorporation, or at least since its registration. The withdrawal of registration in the instant case has been occasioned by a change in law (i.e., per the substitution of section 2(15) by the Finance Act, 2008 w.e.f. 1.4.2009, or A.Y. 2009-10 onwards) vide order u/s. 12AA(3) dated 22.12.2011, and w.e.f. A.Y. 2009-10, i.e., from the time the amended s. 2(15) is in force. There is no estoppel against law, so that no 'right' which is not in terms thereof can be regarded as having 'accrued' or 'vested'. As such, we observe no excess of jurisdiction in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olute manner, but only relatively, i.e., in relation to the turnover or the volume of the residential units sold and/or rented, etc. The assessee was definitely charging less than what a private builder would and, accordingly, cannot be considered as actuated by profit consideration alone. Further, even granting so, the second proviso to section 2(15) places further restriction on the operation of the first proviso, so that the activities covered thereby would not be regarded as not for charitable purpose if the aggregate value of the receipts therefrom do not exceed the threshold limit specified therein. Though the amount, at Rs. 10 lakhs for A.Y. 2009-10 (or at Rs. 25 lakhs for A.Y. 20012-13) is too low in relation to the volume of the assessee's operations, the same (limit) is subject to revision from time to time. At the same time, it may well be that the assessee's receipts fall below that level for a particular year. However, the registration having been withdrawn, it would not be eligible for exemption u/s. 11 of the Act, which postulates registration u/s. 12A or 12AA as a precondition for availment of exemption thereunder on application of income. In other words, registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of registration, and that the same could be reviewed in future. As such, if the circumstances warranting withdrawal/cancellation of registration no longer obtain, it would be open for the assessee to seek a review of the matter. 6.3 In rejoinder, the ld. AR would submit that the decision relied upon by ld. DR is with regard to the denial of the registration u/s. 12A/12AA in the first place, while the present case is of cancellation of registration. The two are on a different footing in-as-much as the scope of the latter is restricted and, two, the onus is on the Revenue, which has not been discharged in the facts and circumstances of the case. With regard to reliance on the decision in the case of Mumbai Cricket Association (supra), the part thereof (para 23, page 18) adverted to by ld. DR does not represent the ratio of the said decision. 7.1 We begin by discussing, firstly, the scope and ambit of section 12AA(3), as withdrawal or cancellation of registration could be validly made in law only within its parameters. The withdrawal, thus, could only be where the Commissioner is satisfied that (refer the provision reproduced at para 5.1 above): ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion are not genuine or are not being carried out.....', in the provision. A change in law is not contemplated. Further, even though, and understandably, the law cannot contemplate a change therein in time, which even otherwise lies in womb of future, and is thus uncertain, there is, even post amendment to section 2(15), no stipulation with regard to the condition of satisfaction by the Commissioner with the objects of the trust or institution, i.e., as obtaining in section 12AA(1)(b), in section 12AA(3). The prescription of satisfaction of the Commissioner extends only to the carrying out of the objects as listed, and genuinely. The scope of section 12AA(3) is therefore limited in-as-much as it excludes a review of the objects as being charitable (or religious) subsequent to the registration of the trust or institution. As such, even though the objects of the trust may no longer be regarded as toward a charitable purpose, i.e., in view of the law as amended, there being no stipulation (in section 12AA(3)) with regard to a continuing satisfaction, registration u/s. 12A/12AA cannot be reviewed and withdrawn with reference to the absence of such satisfaction, which of course has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those sections. Exemption u/s. 11(1) is only upon the application of income for charitable purpose/s, so that it is only where so applied, reading the term 'charitable purpose' as per the extant law, that it could be allowed. The insertion of section 13(8) by the Finance Act, 2012 (w.e.f. 1.4.2009, i.e., A.Y. 2009-10 onwards), from which period the changed section 2(15) becomes operative, removes the matter beyond the pale of any doubt. The matter/issue of exemption u/s. 11 would thus have to be reviewed by the Assessing Officer in assessment on a year to year basis. The primary onus to return its income each year in accordance with the law, it may be appreciated, is on the assessee. The argument advanced as to the inapplicability of even the substituted s. 2(15) in view of 'low' profitability, even as we find no reference to any criteria qua the same therein, is rendered out of place or superfluous in view of our aforesaid findings, and is accordingly not dealt with. Our decision, in conclusion, as would be apparent, is in agreement with that by the tribunal in the case of, among others, Rajasthan Housing Board (supra). The decision by the tribunal in the case of M.P. Road Develo ..... 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