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TMI Blog2011 (7) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... operties for earning rental income and, therefore, it was not carrying out any charitable purpose. In view thereof, a notice was issued u/s 12AA(3) on 26.11.2008 requesting the assessee to explain as to why the registration earlier granted on 27.12.1988 may not be cancelled. After hearing the assessee, the registration was cancelled on the grounds that (i) the assessee is really involved in business activities in which huge surplus is realized from year to year, the details of which have been furnished on page no. 9 in paragraph no. 4.4; and (ii) it has not carried out any charitable activity nor there is any intention to carry out charitable activity as the surplus realized from renting buildings to educational institutions was not applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission taken up by the ld. counsel before us is that the machinery provided for cancellation of registration under sub-section (3) of section 12AA, as it existed on the date of passing the impugned order, did not provide for cancellation of registration granted under sec. 12A although it provided for cancellation of registration granted under clause (b) of sub-section (1) of this section. In other words, the argument is that the order is beyond the competence of the Director of Income-tax (E). For this purpose, reliance has been placed on the decision of Hon ble Delhi High Court in the case of Director of Income-tax (Exemptions) Vs. Mool Chand Khairati Ram Trust in ITA No. 54/2011 dated 04.04.2011, a copy of which has been placed befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. Grant of this power shows that such power was not earlier vested in the Director of Income-tax (E) as inherent power. Nonetheless, such an argument was not taken before the Hon ble High Court, but it becomes clear from the facts that such power was vested specifically in him with effect from 01.06.2010. Therefore, we are of the view that the ld. DIT(Exemptions) was not competent to pass the order of cancellation of registration on 31.12.2009, i.e., before 1st June, 2010. APPROVAL UNDER SECTION 80G(5) 3. The facts of the case are that the assessee applied on 30.06.3008 in form no. 10G for grant of approval under section 80G. The assessee was requested to furnish documents and explanation, as mentioned on page no. 1 of the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, the learned Director of Income-tax (Exemptions) has erred in rejecting the request for exemption u/s 80G95) of the Income-tax Act, 1961. 1.2 That on the facts and in the circumstances of the case and in accordance with the provisions of law, the learned Director of Income-tax (Exemptions) has erred in holding the trust activities is only accumulating assets and not carrying on any charitable activity or utilizing those assets for any charitable activity and its income is not exempt u/s 11 and 12. 2. That on the facts and in the circumstances of the case and in accordance with the provisions of law, the learned Director of Income-tax (Exemptions) has erred in holding that the rent on school building has been charged on market rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which is indisputably a charitable object. Thus, the appeal of the revenue was dismissed. This decision was followed in the appeal of the revenue for assessment year 2002-03 in order dated 10.07.2009, placed in the paper book on page nos. 41 to 48. Thus, the argument of the ld. counsel is that the assessee is entitled to the benefit of section 11. Further, the assessee had been granted registration under section 12A(a). Therefore, approval u/s 80G cannot be denied. 3.3 In reply, the ld. DR relied on paragraph nos. 3 and 4 of the impugned order, the summary of which has already been furnished by us. 3.4 We have considered the facts of the case and submissions made before us. We have already upheld the contention of the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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