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TMI Blog2012 (11) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... d the exercise of his powers u/s 12AA(3) of the Act. According to the ld.counsel, the powers conferred on the Commissioner u/s 12AA(3) of the Act could be invoked on recording his satisfaction and the circumstances which warrants the withdrawal of the registration. The ld.counsel placed his reliance on the judgment of the Orissa High Court in (2011) 336 ITR 389 (Orissa). The ld.counsel for the taxpayer further submitted that the registration u/s 12AA of the Act was granted on 30th January, 1995 after satisfying the object and activities of the taxpayer. For all earlier assessment years exemption was granted by the assessing officer. According to the ld.counsel, the taxpayer was carrying on its activity in accordance with the object that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel submitted that even in case the taxpayer was not carrying on its activity in terms of its charitable trust, the Commissioner at the best may deny exemption u/ss 11 & 12 of the Act. The ld.counsel further submitted that providing employment to needy and deserving citizens is one of the objects mentioned in clause (5) of the Memorandum of Association. The ld.counsel further submitted that providing employment opportunity to the needy and deserving people is a charitable activity. Therefore, the Administrative Commissioner is not correct in withdrawing the registration granted u/s 12AA of the Act. 3. On the contrary, Shri Anilkumar, the ld.DR submitted that no doubt registration was granted u/s 12AA of the Act by the Commissioner. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. We have considered the rival submissions and also perused the material available on record. Admittedly, the Administrative Commissioner granted registration u/s 12AA of the Act. Subsequently by the impugned order, the Administrative Commissioner withdrawn the registration on the ground that the object of the institution was not carried on in accordance with provisions of section 2(15) of the Act. We have carefully gone through the provisions of section 12AA(3) of the Act which reads as under: "12AA(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the Memorandum of Association and considering the provisions of section 2(15) of the Act, can such registration be cancelled or withdrawn after introduction of Proviso to section 2(15) of the Act? We have also carefully gone through the provisions of section 2(15) of the Act. The Parliament defined charitable purpose in section 2(15) of the Act. This is an inclusive definition. One of the objects of the trust is public utility which was considered to be charitable in nature. However, by First Proviso to section 2(15) of the Act, the Parliament intended to exclude the object of 'general public utility' from the definition of charitable purpose provided, if the activity involved carrying on of any activity in the nature of trade, comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer is carrying on an activity in advancement of any other object of general public utility. Once it is considered and granted, subsequent amendment fixing the monetary limit cannot be a reason for withdrawing the registration u/s 12AA(3) of the Act. No doubt, section 12AA(3) provides for cancellation of registration under two conditions, viz. (1) when the activity of the trust or institution is not genuine; (2) when the activity is not being carried out in accordance with the object of the trust / institution. The aggregate value of receipt could be examined by the assessing officer at the time of assessment proceedings. The Commissioner cannot go beyond the two conditions provided in section 12AA(3) for cancelling the registration. In oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e will not confer any right on the taxpayer to claim exemption u/ss 11, 12 & 13 of the Act. In other words, though the registration u/s 12AA is a pre-requisite for claiming exemption the exemption u/s 11, 12 & 13 are not automatic. The taxpayer has to satisfy the conditions prescribed in sections 11, 12 & 13 of the Act for the purpose of claiming exemption under those provisions of the Act. The Taxpayer has to recognize / establish that the aggregate contract receipts do not exceed Rs. 10 lakhs. Therefore, when the contract receipts from railway exceeded the monetary limit fixed by the Parliament, this Tribunal is of the considered opinion that the taxpayer trust may not entitle for exemption u/ss 11, 12 & 13 of the Act. However, this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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