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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 ..... 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 - the revenue authorities have erred in cancelling the registration u/s 12AA(3) - the revenue authorities is directed to restore the registration as granted u/s 12A – Decided in favour of Assessee. - ITA No. : 373/Mum/2012 - - - Dated:- 10-7-2013 - Shri B. Ramakotaiah And Shri Vivek Varma,JJ. For the Appellant : Shri A. H. Dalal For the Respondent : Shri Surinder Jit Singh ORDER Per Vivek Varma, JM:- The instant appeal has been filed by the assessee against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and social interaction, which clearly fell in the non allowance field, i.e.: a) any activity in the nature of trade, commerce or business or b) any activity of rendering any service in relation to any trade, commerce or business. as prescribed by Circular No. 11/2008, dated 19.12.2008. 4. In its reply to the show cause notice no. DIT/E/ITO(HQ)/Withdrawal/49/2011-12, dated 08.11.2011, issued by the DIT(Exemption), on the issue of other activities, the assessee responded, "As referred in your show cause why the activities of sale of liquor, canteen compensation, card games, guest fees and banquet hall receipts carried on the Gymkhana should not be treated as activities amounting to trade or commerce. In response to the same we wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objects laid down as per the Memorandum/Trust deed. The Trust has been regularly assessed with this office and the assessment orders for previous years have all upheld the contention of the charitable nature and purpose of the Trust. Even the Tribunal which is supposed to be the ultimate authority as regards to the question of facts have upheld the very charitable nature/purpose of the Trust and granted exemption u/s 11 on various previous instances. The ITAT orders are submitted on records for your kind perusal. The objects of the Trust being encouragement of sports and games are clearly charitable in nature and in terms of the definition contained in section 2(15) of the LT. Act 1961. Merely because the Trust charges fees from its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 out 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 any other consideration, irrespective of the nature of use or application, or retention of the income from such activity. Provided further that the first proviso shall not apply f the aggregate value of the receipts from the activities referred to therein is ten lac rupees or less in the previous year. On careful consideration of the above proviso, it is amply clear that if any trust/Inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 12AA(3) of the Act get attracted. Thus in view of the facts and circumstances as discussed above, I therefore, accordingly hold that the assessee trust has become non genuine and the registration as allowed to it in earlier years u/s 12AA is hereby cancelled/withdrawn w.e.f. A.Y. 2009-10 and the assessee trust is accordingly held as non charitable Trust / Institution". 6. Against this order, the assessee is in appeal before the ITAT. 7. Before us, the AR reiterated the submissions made before the revenue authorities and submitted that simply because the assessee trust is providing certain other activities does not per se mean the cancellation of registration u/s 12AA(3) of the Income Tax Act, 1961. 8. According to the AR, there ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the import of section 2(15), brought in by the legislature. It is not the case of the department that the assessee crossed the twin conditions, as mentioned in the section 12AA(3), which are, " ... 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 ...". In the instant case, the department has nowhere mentioned that "social inter-course among members" was not one of the objects of the trust, when it was originally formed on 04.10.1934. This aspect, along with the two orders of the coordinate Bench of ITAT in Mumbai in ITAs No. 4315 4316/Mum/2010 dated 25.11.2011 and the earlier order and ITA No. 332/Mum/2005, which was relied upon in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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