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TMI Blog2015 (4) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... institution not being carried out in accordance with the object of the trust or institution. It is not in dispute that the Director of Income Tax (Exemption) has not recorded any such finding about the violation of the two conditions stated above. The Tribunal while deciding the matter has rightly recorded a finding that a perusal of impugned order shows that Director of Income Tax (Exemption) has not arrived at any such finding. The fact that the receipts from commercial activities are more compared to the overall receipts of the charitable organization can neither lead to the conclusion that the activities of the trust or institution are not genuine nor it can be said that the activities of the trust or institution are not being carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the year ended 31.3.2009 shows the total receipts by way of hiring Kalyana mantapa to an extent of ₹ 37,45,915/-, ₹ 3,51,334/- from Samskritha Mandira and ₹ 1,75,500 from generator hiring charges and excess of income over expenditure is at ₹ 30,72,028/- and ₹ 42,23,142/- for the assessment years 2008-09 and 2009-10 respectively . The extract of income and expenditure account for the financial year 2008-09 and 2009-10 are reproduced as under: Expenditure F.Y:2008-09 F.Y.2009-10 To Repairs and maintenance 553362 418906 To Luxury Tax 764488 552485 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1748006 1973544 Luxury tax collected 764488 584587 Telephone charges collected ₹ 4793 Less: Telephone charges paid ₹ 3806 987 1463 Vydhika mandira receipt 178840 75120 3. The Director of Income Tax (Exemption) considering the entire material on record, by his order dated 21.12.2011, exercising his powers under the provisions of Section 12A of the Act has cancelled the registration observing that the examination of records shows that the Mandali has earned a net profit of ₹ 30,72,028/- for the assessment year 2008-09 and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as correct in holding that the assessee is entitled to continue registration under Section 12A of the Act, without appreciating the fact that, in view of the amendment to Section 2(15) of the Act, the activities carried on by the assessee were commercial in nature and therefore cannot be considered as charitable under Section 2(15) of the Income Tax Act? ii) Whether the Tribunal was correct in holding that the Director of Income Tax (Exemption) has not given any finding with regard to genuineness of the activities or the activities not in accordance with the objects of the institution, without appreciating that clear finding is recorded holding activities of the assessee were not in accordance with the objects and the objects are amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered by the assessing authority to extend the benefit of exemption or not and sought to justify the impugned order passed by the Tribunal. 8. We have given our thoughtful consideration to the rival contentions urged by the parties to the lis and it is not in dispute that the assessee was granted registration under Section 12A of the Act. Now the said registration is cancelled by invoking the power conferred under the provisions of Section 12AA(3) of the Act. Therefore, it is necessary to find out under what circumstances the registration granted earlier could be cancelled. Section 12AA(3) of the Act reads as under: [(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipts from commercial activities are more compared to the overall receipts of the charitable organization can neither lead to the conclusion that the activities of the trust or institution are not genuine nor it can be said that the activities of the trust or institution are not being carried out in accordance with the objects of the trust or institution and therefore, the two conditions stipulated under the provisions of Sub-section (3) of Section 12AA of the Act, which empowers the authority to cancel the registration, do not exist in the present case. The registration granted is cancelled in view of the amendment of first proviso to Section 2(15) of the Act. That is not a ground specified in the statute for cancellation of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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