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TMI Blog2014 (4) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... propaganda for Physical Education 6. To collect and give information on matters relating to Physical Education 7. To prompt the Physical, moral, social and cultural welfare and to provide healthful recreation by execution of outdoor and indoor games. 2.1 The Assessee was registered as a charitable trust, the above being its objects, falling in the category of "advancement of any other objects of general public utility" as per definition of charitable purpose given u/s. 2(15) of the Income tax Act. The DIT(E) noticed that the Assessee was carrying out activities in the nature of trade, commerce or business etc. and gross receipts there from were in excess of Rs.10.00 lacs. So by taking resort to the newly added proviso w.e.f. 01.04.2009 to section 2(15) of the Income tax Act he cancelled the registration of assessee. The Assessee is thus in appeal before us. 3. Before us the ld. Authorized Representative has submitted that registration once granted to the Assessee being a charitable institution can not be cancelled or taken away because of the newly inserted proviso to section 2(15) of the Income tax Act which defines charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Assessee received huge amounts on account of royalty from decorators amounting to Rs.7,26,013/-, Rs.21,60,000/- from caterers. Rs.7,65,000/- from restaurants, and also earned venues and ground hiring charges amounting to Rs.75,55,528/- and fee from various games amounting to Rs.53,03,311/-,which were in the nature of business income and since total receipts were in excess of the limit prescribed under second proviso to section 2(15) which has come into effect from assessment year 2009-10, hence, he cancelled the registration from the said assessment year. He, further observed that since the activities of the Assessee did not fall within the definition of charitable purpose as provided u/s. 2(15) of the Act, hence, the trust itself becomes non genuine and as such the provisions of section 12AA(3) gets attracted. He accordingly cancelled the registration w.e.f assessment year 2009-10 and declared trust as non-charitable trust. 4. The ld. Authorized Representative before us has relied upon various authorities given by co-ordinate benches of the Tribunal, to stress his point : i. ITAT decision in the case of Gujarat Industrial Development Corpn. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y charitable trust is not barred so as to exclude its activities from the definition of charitable purposes. However, a limitation has been imposed to the effect that the gross receipts from such activities should not increase Rs.10.00 lacs. The DIT(E) has cancelled the registration on the ground that the total receipts of the Assessee trust has exceeded Rs.10.00 lacs during the previous year. He has further held that once a trust loses its identity or character of charitable trust, it becomes a non-genuine charitable trust. Hence, the provisions of section 12AA(3) gets attracted. Section 12AA for the sake of convenience is reproduced as under :- "12AA. Procedure for registration.- (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) of sub-section (1) of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are granted to a trust or institution because its activities fall within the definition of charitable purposes as defined u/s. 2(15) of the Act. Under section 12AA(3) the registration of such trust/institution can be cancelled if its activities have become non genuine or it is not carrying out activities as per objects of the institution. Once the activities of a registered charitable institution cease to be charitable or do not fall within the purview of definition of 'charitable purpose' as per the relevant provisions/definitions given under the Act, then, such institution would not be entitled to tax exemption or benefits granted under the Act. Even despite the fact that such an institution, otherwise, is carrying out charitable activities. 5.3 Now, the question before us is as to whether the registration of the Assessee as a charitable institution is liable to be cancelled because of the reason that the total receipts exceeded the limit of Rs.10.00 lacs as provided under the second proviso to section 2(15) of the Act. In our view the word "previous year" mentioned in the second proviso to section 2(15) is more relevant. It has not been mentioned that the first proviso, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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