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TMI Blog2018 (8) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... ly specifying the exemption to be available only on the satisfaction of the AO. The instant proceedings were on the report of the AO that the objects of the Trust are deviated from. We do not find a mere change of opinion, and the Commissioner has dealt with the transactions of the assessee and also examined the accounts for the two years, which squarely fall under the exercise as provided for under sub- Section (3) of Section 12AA. The Commissioner was satisfied that the activities of the Trust are not being carried out in accordance with the objects of the Trust. The assessee, as rightly found, is engaged in a business and there can be no registration as a charitable institution. - Decided against the assessee - ITA No.213 of 2013 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Trust was to establish a fund for carrying out public charity and to that end, accept contributions, donations and endowments from time to time made by the Public, Government Bodies, Institutions at both National and International level. The funds were also to be used for implementation of the objects and the purposes of the Trust. The assessee on the basis of the deed registered on 4.1.2003, applied for registration under Section 12AA of the Income Tax Act, 1961 ('Act' for short) on 15.10.2004 by way of an application. The same was allowed by the Commissioner on 11.3.2005 as per Annexure-A. Annexure-A specifically provided that the question of eligibility for exemption under Section 11 will be decided by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered by the Commissioner at the time when the registration was granted. The Commissioner had also provided a rider insofar as any business income generated from the activities of the assessee being eligible for exemption only on the assessing officer finding it so eligible. That would suffice insofar as taxing any surplus, if at all, and there could be no cancellation of registration, is the submission of the learned counsel for the assessee. 4. The Tribunal extracted clause 3(i) of the object clause in which there was a specific object insofar as aiding and supporting distribution of food to students or poor people or the down trodden. There was no requirement that the assessee itself should prepare and supply food out of its own r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he schemes the assessee takes money from the State Government or the intermediary. The further contention that surplus is applied in the deficit of other program is a perfect ground for claiming business expenditure, but not to get a registration as a charitable institution. 7. In deciding the issue, it is very pertinent that the intermediary institution, has paid money for the implementation of the Schemes. The implementation of such Schemes would not lead to any charitable activity by the respondent-assessee entitling registration under Section 12AA. The transaction as admitted by the assessee is not one which would enable registration under Section 12AA. The proceedings were initiated for cancellation, on the report of the AO that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exercise as provided for under sub- Section (3) of Section 12AA. The Commissioner was satisfied that the activities of the Trust are not being carried out in accordance with the objects of the Trust. The sub-contract of the assessee cannot be considered to be a charitable activity, especially since the supply of food is with the funds of the State Government, received by the assessee as contract amounts. The activity of the assessee confined to such sub-contracts cannot be deemed to be a charitable activity and hence the Trust is not entitled to registration under Section 12AA. The Commissioner looked at the activities of the assessee and cancelled the registration for reason of the assessee being unable to substantiate the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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