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TMI Blog2017 (3) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Exemption) had exceeded his jurisdiction by cancelling the registration of the assessee trust u/s 12A, w.e.f A.Y. 2009-10, despite the fact that he was seized of such jurisdiction only w.e.f 01st June, 2010, is found to be misconceived and as such does not merit acceptance, is thus rejected. We thus in light of our aforesaid observations therein set aside the order of the DIT(Exemption) cancelling the registration granted to the assessee trust u/s 12A of the ‘Act’. We may however clarify that as we have set aside the cancellation of the registration of the assessee trust by the DIT(Exemption) vide his order passed under Sec. 12AA(3), which was assailed before us by the assessee, therefore we refrain from adjudicating the issue as to whether the activities of the assessee trust, viz collection of ‘Auditorium fees’ would be hit by the provisions of Sec. 2(15), or not, which thus is left open, and the assessee shall remain at a liberty to raise and contest the same before the A.O. Thus the ‘Ground of appeal No. 2’ is disposed of by us in terms of our aforesaid observations, and as such is partly allowed. - ITA No. 7041/Mum/2012 - - - Dated:- 8-2-2017 - SHRI D.KARUNAKARA RAO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as regards filing of the appeal slipped from his mind. It is stated that it was only when two voluntary sewaks of the assessee trust approached Mr. Kapadia, it was only then that he recollected the lapse on his part and immediately took the requisite steps for restoration of the registrations of the trust under Sec.80G/12A which had been cancelled by the DIT(exemption). It is claimed by the assessee that the accountant due to his ill health could not even recollect the exact date as to when the order of the DIT(exemption) under Sec.12AA(3) was received by him. The assessee trust after approaching its counsel in the week of November, 2012, had thus without involving any further delay filed the present appeal with the Tribunal as on 23.11.2012, which by the time involved a delay of 237 days. That in support of the aforesaid facts the assessee trust had filed alongwith its application seeking condonation of delay, an affidavit of the chief accountant Shri Mahendra Kapadia who had deposed that he looks after the accounts and taxation matters of the main trust ISKCON and its sisters concern including the assessee trust and had duly admitted that the delay in filing of the present app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities in the nature of trade, commerce or business etc, and the gross receipts from the same were in excess of the stipulated limit of ₹ 10 lac as stood contemplated under the first proviso of Sec. 2(15). The DIT(Exemption) referring to the Income Expenditure A/c of the assessee trust therein observed that the latter had earned Auditorium collections of ₹ 42.43 lacs during the year. The DIT(Exemption) being of the view that as the earning of Auditorium collections was in the nature of a systematic commercial exploitation of its assets, therefore the assessee would be hit by the first proviso to Sec. 2(15), and as per the mandate of law it would be deemed that the assessee trust was not existing for a charitable purpose. The DIT(Exemption) in the backdrop of his aforesaid observations thus concluded that once it was held that the assessee trust was not for charitable purpose, then it would no more stand entitled for claim of exemption under Sec. 11 of the Act . The DIT(Exemption) thus being of the view that the assessee trust had become non-genuine for the purpose of Sec. 11, therefore proceeded with and vide his order passed under Sec. 12AA(3), dated. 28.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t after being hit by the first proviso of Sec. 2(15) could safely be held as not existing for charitable purpose anymore, therefore the DIT(Exemption) vide his order passed under Sec. 12AA(3) had rightly cancelled the registration that was granted to the assessee trust u/s 12A. 6. We have heard the Ld. Representatives of both the parties, perused the order of the DIT(Exemption), and the material placed on our record. We find that the assessee trust as a matter of record was enjoying the registration under Section 12A for a period as long as 32 years(supra), i.e till the same was cancelled by the DIT(Exemption), vide his order passed under Sec. 12AA(3), dated. 28.12.2011. Thus in the backdrop of the aforesaid facts, it can safely be gathered that for a period of more than 32 years, the revenue under the aforesaid statutory provisions had been acknowledging the assessee as a charitable trust. The DIT(Exemption) referring to the Income Expenditure A/c of the assessee trust had therein observed that the latter had earned Auditorium collections of ₹ 42.43 lacs during the year. The DIT(Exemption) being of the view that as the earning of Auditorium collections was in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time under section 12A as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996)] and subsequently the [Principal Commissioner or] Commissioner is satisfied 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, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. 8. We are of the considered view that in the absence of anything being provided in Sec. 12AA(3) that the registration granted to a trust under Sec.12A/12AA of the Act would stand cancelled where the Trust is hit by the first proviso of Sec. 2(15), we are thus unable to persuade ourselves to subscribe to the findings of the DIT(Exemption) who had concluded to the contrary, and had cancelled the registration of the assessee trust on the said count. We are not oblivious of the settled position of law that while interpreting the scope and gamut of a statutory provision, no violence c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 ₹ 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 as observed is a rigorous proviso, will not apply if the total receipts from the charitable activities exceeds the limit of ₹ 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 ₹ 10.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to our above observations cancellation of registration granted to Assessee u/s. 12A is hereby set aside and same is hereby ordered to be restored. 9. We are thus of the considered view that now when it is neither the case of the revenue that the assessee trust which for years had been acknowledged as a haritable trust had during the year embarked on to any such new activities, which can safely be characterized as non-genuine activities, nor is it the claim of the revenue that the assessee trust is found to be carrying out activities which are not in accordance with its objects, therefore in the absence of satisfaction by the assessee of either of the aforesaid preconditions which forms the foundation for exercising the jurisdiction by him for cancelling the registration of the assessee trust under Sec. 12AA(3), it can safely be concluded that the DIT(Exemption) had wrongly cancelled the registration of the assessee trust vide his order passed u/s 12AA(3) of the Act . We thus in light of our aforesaid observations thus set aside the order passed by the DIT(Exemption) u/s 12AA(3) and therein restore the registration of the assessee trust. 10. We now advert to the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooked into by the Hon ble High Court of Bombay in the case of : Singhad Technical Education Society Vs. CIT Anr. (2012) 343 ITR 23 (Bom), wherein the Hon ble High Court had held as under:- Parliament while empowering the CIT to cancel registration of a trust registered under s. 12A has deliberately used the words obtained registration at any time under s. 12A . Therefore, power under s. 12AA(3) can be exercised by the CIT in respect of a trust registered prior to 1 st June, 2010. The mere fact that a part of the requisites for the action under s.12AA(3) is drawn from a time prior to its passing namely registration as a charitable trust under s. 12A prior to 2010 would not make the amendment retrospective in operation. The amendment does not take away any vested right nor does it create new obligations in respect of past actions. Alternatively, even if it is construed to be retrospective, it cannot be held to be violative of Art. 14 . Thus in light of the aforesaid judgment of the Hon ble High Court, the contention of the Ld. A.R that the DIT(Exemption) had exceeded his jurisdiction by cancelling the registration of the assessee trust u/s 12A, w.e.f A.Y. 2009-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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