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TMI Blog2018 (5) TMI 2054X X X X Extracts X X X X X X X X Extracts X X X X ..... )/W/8/118/2011-12/1869 dated 28.02.2012. 3. The ld. CIT observed that the assessee has been filing its return of income claiming exemption u/s 11 of the I.T. Act. It is running educational institutes in the name and style of Institute of Marketing and Management, New Delhi. He observed that during the course of assessment proceedings for assessment years 2009-10 and 2010-11, the Assessing Officer had noted a large number of discrepancies in the accounts and affairs of the assessee society for which he had rejected the claim of exemption u/s 11 and held its income to be taxable as AOP. Keeping in view the discrepancies noted in the assessment order passed by the Assessing Officer and also the DGIT's order withdrawing approval u/s 10(23C)(iv), notice u/s 12AA(3) was issued to the assessee pointing out certain discrepancies as per para 2.1 of the order of the ld. CIT. 4. The assessee filed a reply vide submission dated 01.11.2012 and 04.12.2012. The assessee also requested that the proceedings may be kept in abeyance till the issue of withdrawal of exemption u/s 10(23C)(iv), which is presently before the Hon'ble High Court, is decided. It was subsequently brought to the notice of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the institution was established. The Assessing Officer while framing the assessment has also pointed out the same irregularities in its functioning. Keeping in view of the above irregularities pointed out by the DGIT and by the Assessing Officer, he again issued a show-cause notice to the assessee to explain as to why the registration granted u/s 12A(a) of the I.T. Act be not withdrawn. Rejecting the various explanations given by the assessee and observing that the violations regarding norms of Registrar of Societies, violations with regard to AICTE norms and financial irregularities and further observing that the assessee misconducted itself by claiming that it is approved u/s 35(1)(iii) of the I.T. Act and donations made to it enjoy income tax exemption, the ld. CIT cancelled the registration granted u/s 12A(a) of the I.T. Act. Since he cancelled the registration granted u/s 12A which is a primary requirement for granting approval u/s 80G(5), the approval granted u/s 80G(5) dated 20.05.2009 was also cancelled. 6. Aggrieved with such order of the ld. CIT, the assessee is in appeal before the Tribunal by raising the following grounds :- "1. On the facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficates. 9. Referring to the decision of the Delhi Bench of the Tribunal in assessee's own case vide ITA no.4182/Del/2013 order dated 21.02.2014 for assessment year 2009-10, he submitted that the Tribunal has dealt with all the additions made by the Assessing Officer in respect of all those discrepancies and has decided the case in favour of the assessee. Further, ld. CIT(A) relying on the order of the Tribunal for assessment year 2009-10 has decided the issue in favour of the assessee for assessment years 2010-11 and 2011-12. Further, the appeal filed by the Revenue against the order of the Tribunal has already been dismissed by the Hon'ble High Court. Therefore, in view of the order of the Tribunal in assessee's own case for assessment year 2009-10 which has been followed by the ld. CIT for assessment years 2010-11 and 2011-12, the order of the ld. CIT cancelling the registration granted earlier u/s 12A(a) should be setaside. 10. The ld. DR on the other hand heavily relied on the order of the ld. CIT. 11. We have considered the rival arguments made by both the sides, perused the order of ld. CIT and the Paper Book filed on behalf of the assessee. We have also considered the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objects of the assessee society being education in nature and fall within the meaning of charitable purpose u/s 2(15) of the I.T. Act and since the society was registered u/s 12A allowed the claim of exemption u/s 11 of the I.T. Act. Since the appeal filed by the Revenue has already been dismissed by the Tribunal and upheld by the Hon'ble High Court and the assessee society is imparting education which is not in dispute, therefore, ld. CIT, in our opinion, is not justified in cancelling the registration granted earlier by invoking provisions of section 12AA(3) of the I.T. Act. The addition, if any, can be made by the Assessing Officer in the regular assessment but registration cannot be cancelled only on the basis of certain violations by the trustees unless and until it is proved that the assessee trust is not fulfilling its main object of imparting education. 14. We find the Hon'ble Karnataka High Court in the case of Islamic Academy of Education (supra) while deciding a somewhat identical issue has observed as under :- "4. The appeal was admitted to consider the following substantial questions of law: Whether the Tribunal was correct in holding that the registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1996) and subsequently the 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.]" As is clear from the circular No.5 of 2005 dated 15.7.2005 issued by the Central Board of Direct Taxes, the aforesaid section was amended so as to specifically provide that if the Commissioner of Income Tax is satisfied that the activities of any Trust or Institution are not genuine or are not being carried out in accordance with the objects of the Trust or Institution, he shall, after giving reasonable opportunity of being heard to the concerned Trust or Institution, pass an order in writing cancelli ..... 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