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TMI Blog2014 (2) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... o jurisdiction to cancel the registration of the assessee trust u/s. 12A of the Act for A.Y. 2009-10 and secondly, that the receipts of income of the assessee were not in the nature of business income and therefore, proviso to section 2(15) are not attracted to the case of the assessee. He has further submitted that the objects of the assessee being charitable in nature, therefore, the registration earlier granted has been wrongly cancelled by the DIT(E). It has been further submitted that the CBDT has issued a Circular No.1/2011 dated 06.04.2011 stating therein that the registration granted u/s 12A of the Act can be cancelled by invoking the amended provisions of section 12AA(3) of the Act for the assessment year 2011-2012 and subsequent assessment years, therefore, the cancellation of registration u/s 12AA(3) of the Act for the assessment year 2009- 2010 was not justified. In his rival submission, the learned Departmental Representative supported the order of the learned DIT(E). He has further relied upon section 21of General Clauses Act to submit that the power of the DIT(E) to grant registration was inclusive of power to cancel the registration. 4. We have heard the ld. repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act, which were brought on the statute with effect from 01.06.2010, held as under :- "20. In the light of above discussion, If we consider the facts of the case under consideration as discussed above, we find that the CIT is not correct in cancelling the registration under section 12AA(3) of the Act which has been granted under section 12A of the Act on the following grounds and reasons:- (i)Section 12AA(3) of the Act empowers the CIT to cancel such registration if he satisfy that activities of the trust or institutions are not genuine or are not being carried out in accordance with objects of the trust or institution as the case may be. The combined reading of both the sections makes it clear that before 01.06.2010 registration can be cancelled only on those cases where the registration has been granted under section of the Act. Before 01.06.2010 this section 12AA(3) nowhere empowers the CIT to cancel or withdraw registration under section 12A of the Act. In absence of such power the registration granted under section 12A cannot be withdrawn or cancelled before 1.6.2010. The power of cancellation of registration under section 12A of the Act came to be incorporated by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Authority is not charitable as per amended provisions of section 2(15) of the Act for which the CIT is not empowered to add such own condition in the statute. Similar view has been taken by the I.T.A.T., Ahmedabad in the case of Ahmadabad Urban Development Authority v. DIT, ITA No.754/Ahd/ 2010, order dated 21.5.2010. 10. In the present case also the registration was granted u/s 12A of the Act. As per the Circular issued by the CBDT, which is binding on the Income-tax department, the registration already granted u/s 12A of the Act can be cancelled only for assessment year 2011-2012 and subsequent assessment years by considering the amended provision which is applicable from 01.06.2010. However, the assessment year involved in this case is assessment year 2009-2010, therefore, the registration cancelled by the DIT(E) was not justified." 5. Since the assessment year involved in the case in hand is also 2009-10, hence respectfully following the above decision of the Tribunal, it is held that the DIT(E) had no jurisdiction to cancel the registration in this case. 6. So far so, the contention of the ld. AR that the objects of the assessee trust being charitable in nature, hence the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Conferences / Seminars at major Centres in India. [3] The assessee is imparting education in plastics by different ways and means like holding courses, holding conferences, holding lectures, publishing literature on new subjects, publishing its journal etc. Thus the activities of the assessee trust are purely of a general public utility in as much as it helps all those classes of persons connected with the plastics and its application with a useful knowledge and information from time to time. 4] The international conference held in the month September,2008 prove beyond doubt that the said topics were held mainly to educate and pass on the latest information on the subject of plastic to the members of the assessee trust. Thus, the international conference held by the assessee trust has a tremendous educational value as the international conference is meant for education and disseminating information and the latest technology on the subject of plastic to the members of the assessee trust." 7. After perusal of the submissions as well objects of the assessee trust and also after going through the documents on record, we may observe that the objects and the activities of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion Council vs. DIT(E)" ITA No.325/Mum/2012 decided on 12.02.2014, (One of us being party to the decision) wherein the tribunal while adjudicating upon the issue has observed as under: "4. We have heard the learned counsel for the assessee and the learned Departmental Representative. It may be observed that identical issue came for adjudication before the Coordinate Bench of the Tribunal in the case of "Ghatkopar Jolly Gymkhana vs. DIT" [2013] 40 taxmann.com 207 ITA No.882/Mum/2012 decided on 23.10.2013, (present Judicial Member being party to that order) and while dealing with the issue, the bench observed as under: "5. We have considered the submissions of the ld. Representative of the parties. It may be observed that the first proviso to section 2(15) is a very rigorous provision which excludes the institution or trust from the definition of charitable trust, if such trust carries activities 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. So bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(15) is more relevant. It has not been mentioned that the first proviso, which as observed is a rigorous proviso, will not apply if the total receipts from the charitable activities exceeds the limit of Rs. 10.00 lacs during "any year" rather, the word is "previous year" . That means the benefits will not be available to the Assessee for the assessment year in which the gross receipts of income exceeds the limit of Rs. 10.00 lacs, however, that does not mean that such benefits will not be available to the institution for all other assessment years during which its receipts does not cross the limit of Rs. 10.00 lacs. The word "previous year" mentioned in the second proviso makes it liberal to get an interpretation that it is not the registration of the institution as charitable institution which is affected, rather, it is the eligibility of the said institution to get tax exemption/ benefits which is affected that too for the relevant year during which the gross receipts of the institutions cross the limit of Rs. 10.00 lacs. The insertion of second proviso has not made the definition restrictive or rigorous rather with the insertion of second proviso to section 2(15) of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. All that ultimately would arise in such cases is the question of considering whether Section 11 of the Act would at all apply to exempt these income from liability. These are matters of assessment and has nothing to do with the genuineness of the activity or the activities not in conformity with the objects of the trust. As rightly pointed out by learned Senior counsel appearing for the assessee, as is evident from the reading of Circular No.11 of 2008 dated 19.12.2008, the object of the insertion of first proviso to Section 2(15) of the Act was only to curtail institution, which under the garb of 'general public utility', carry on business or commercial activity only to escape the liability under the Act thereby gain unmerited exemption under Section 11 of the Act." 7. The Hon'ble Madras High Court further in 'para 45' of the above judgment observed that if a particular activity of the institution appeared to be commercial in character, and it is not dominant, then it is for the Assessing Officer to consider the effect of Section 11 of the Act in the matter of granting exemption on particular head of receipt. The mere fact that the said income does not fit in with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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