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TMI Blog2014 (2) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ke cricket, tennis, badminton, a library consisting of sports books and periodicals, other indoor and outdoor games facilities. Vide sanction letter dated 20.03.1984, the CIT, Bombay City IV, Bombay allowed the registration of the trust under section 12A(a) of the Income Tax Act, 1961 and was granted registration no. TR/21085. Since then, the assessee was enjoying the exemption granted by the Income Tax department on account of taxes, if any. 3. In the assessment proceedings for assessment year 2009-10, the AO came to a conclusion that the assessee trust was carrying on the activities, which were in the nature of trade, commerce, business etc. This, he concluded by noticing that out of the receipts, the assessee had earned income by the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articipants to contribute to the trust, whereby the Trust can use and deploy the said funds for betterment of facilities and utilities upgrading of the instruments and equipments for the sports and promotion of the trust. The Gymkhana has separate card rooms where in the games of the cards are played. Also the Gymkhana has different types of competitions in the games of cards. The income arising from the card games is out of the sale of pack of cards to the players. The Gymkhana is extensively renovating and upgrading its facilities for the promotion of various sports catered on board. The Gymkhana is very old and presently requires a lot of repairs and, renovation. These revenue streams aid the Gymkhana to better its facilities and scale, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sports facilities for General Public. The fact that without becoming a member of the trust the facilities provided by the trust cannot be availed of, would not by itself indicate that the activities of the Club are non-charitable. The word "public" used in the expression "object of General Public Utility" in section 2(15) does not necessarily refer to the entire public. It is to embrace and include a segment of the public to bring the expression within the ambit of Section 2(15)". 5. The DIT, after considering assessee reply held, "I have considered the submission of the assessee carefully and after going through the facts of the case, I am not inclined to agree with the submissions of the assessee. First of all, I would like to reprod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of aforesaid proviso. Therefore, in the assessee's case there are receipts of huge amounts on account of income from sale of Liquor etc. Rs.1,45,99,037/-, Canteen compensation of Rs. 20,67,806/-, Card/Daily games Rs. 81,883/-, Guest fees Rs. 31,50,078/- and income from banquet hall, as mentioned in the foregoing paras which are clearly in the nature of business income and since these receipts are in excess of monitory limit as led down in the aforesaid proviso, there is a clear cut contravention of the provisions of Section 2(15) r.w. proviso which has come into effect from A.Y. 2009-10. Once a charitable Trust / Institution hit by aforesaid proviso, then there is deeming provision that such entity shall not be for a charitable purpose, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment cannot get cancelled, without the change of objects and character of the trust. 9. He further placed reliance on certain decisions, including the decision in ITAs no. 4315 & 4316/Mum/2010 in assessee's own case, wherein the revenue had raised the issue, as to why the assessee was treated as charitable institution, the moment the trust gets covered u/s 2(15) of the Act. The coordinate Bench, relying on its earlier decision in ITA no. 332/Mum/2005 in the assessee's own case, dismissed the appeal filed by the department. 10. The AR pleaded that the registration be restored. 11. The DR on the other hand submitted that with the insertion of the section 2(15), the character of the charitable trust has got very limited scope and that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2(15), which he ignored.
15. We notice, none of the revenue authorities have made any observation/comments on the objects recited as early as 04.10.1934 of the assessee trust, the twin conditions existing in section 12AA(3) and ignoring the existing orders of the coordinate Bench in the case of the assessee.
16. As per the judicial propriety, as well as the facts coming out of the documents placed before us, we are of the opinion, the revenue authorities have erred in cancelling the registration u/s 12AA(3). We, therefore, direct the revenue authorities to restore the registration, as granted u/s 12A.
17. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open Court on 10th July, 2013. X X X X Extracts X X X X X X X X Extracts X X X X
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