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TMI Blog2012 (12) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... thus it is a half hearted effort to cancel the registration and putting the career of about 2,500 rural students of the reputed school at stake. Therefore it is humbly requested to restore the registration. 3. It is important to bring to your honours kind notice that at any stage the allegations made by the CIT IV Pune are not proved with documentary evidences or otherwise, therefore kindly restore the registration u/s. 12A to your appellant trust. 2. The assessee is a Trust registered under the Bombay Public Trust Act. The assessee was granted the registration u/s. 12A of the Act on 15.1.1989. The Ld CIT has observed that the assessee was asked to file the details of the fixed asset for the current year and reconcile all the investments like auto sweep investment, investment in building and F.D. etc., It is observed that though the details were filed , the same were not reconciled with cash and bank balances for the F.Y. 2007-08 and F.Y. 2008-09. The additions to the assets were also not supported by the receipts or any other bills particularly in respect of school bus library, furniture, repairs, computers, educational equipments, compound wall, electrical equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d substance, there is a charge against Managing Trustee for evading the legitimate payment of his individual income-tax. He further observed that so far as the A.Ys. 2009-10 and 2010-11 are concerned, it is reported that the assessee has spent less than 85% on the object of the trust and he otherwise also not eligible for exemption u/s. 11 to Sec.13. 2.3. The Ld CIT has noted that the assessee trust is running a school in residential premises belonging to the Girish Society and the residents are complaining about business activity of the school run by the trust. The Ld CIT asked the assessee to produce the permission from the concerned Registrar of the Co-operative Society for running the said school in the private Society. He, therefore, came to the conclusion that the assessee is running the school in the illegal premises (?) He has further noted that there is no Bank A/c is in the name of the Trust but Bank A/c. is in the joint names of the Chairman and Head Mistress. Finally he concluded that he is satisfied that there is no genuine trust and activities are not carried in accordance with the objects of the Trust. Ld CIT has, therefore, cancelled the registration granted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Sec. 12AA(3) had come for the judicial scrutiny in the case of Oxford Academy for Career Dev. (Supra) and it is held as under : The expression charitable purpose is defined in section 2(15) of the Income-tax Act, 1961. It is of inclusive nature as revealed in the language. Earlier the words the advancement of any other object of general public utility in the definition were succeeded by the words not involving the carrying on of any activity for profit . These words were omitted by the Finance Act, 1983, with effect from April 1, 1984. The order cancelling the registration granted to a trust or institution under section 12AA being a quasi-judicial order does not fall within the category of orders mentioned under section 21 of the General Clause Act, 1897, which provides that the power conferred on an authority to issue orders includes the power to rescind such orders, and the Commissioner would not have power to rescind the order passed by the Commissioner earlier granting the registration to a trust or institution. Section 12AA(3) was incorporated with effect from October 1, 2004, to empower the Commissioner to cancel the registration granted to a trust or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose. Thus, the order cancelling the registration by the Commissioner as per then law was without power and jurisdiction and, therefore, it was liable to be set aside. 6. In the case of Aggarwal Mitra Mandal Trust (Supra), in which the Tribunal has explained the scope of powers of the CIT for refusing to grant the registration u/s. 12AA of the Act and thus held as under : 7. As already noted, the procedure for registration laid down in section 12AA requires the CIT to satisfy himself about the genuineness of activities and object of the trust or institution and as such, the scope of his powers is limited in this regard to make such enquiries, as he may deem fit, to satisfy himself in respect of these two aspects. As held by Hon ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra), an object beneficial to the section of the public is an object of general public utility and to serve a charitable purpose, it is sufficient if the intention is to benefit a section of the public as distinguished from a specified individual. This decision of Hon ble Apex Court followed subsequently by Hon ble Allahabad High Court in the case of Surji Devi Kunji Lal Jaipuria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme laid down in sections 11, 12, 12A, 12AA discussed, makes it explicitly clear that the said provisions become operative or relevant only at the stage of assessment when assessee for benefits under section 11 or section 12 while computing the total income of the assessee of the relevant previous year. The application of section 13 thus falls within the exclusive domain of the Assessing Officer and the provisions contained therein can be invoked by him while framing the assessment and not by the CIT while considering the application for registration under section 12AA. 7. In the case of Ajit Education Trust (Supra), the Tribunal has again examined the scope of powers of the CIT for refusing the registration u/s. 12AA and it is held as under : 17. The proposition laid down therein has to be applied in the present appeal. That the ld. Commissioner has to comprehend the objects of the Trust whether they are meant for public utility [requirement of section 12AA(1)(b)] and secondly that the activities have actually as also genuinely been carried out to fulfil the aims of the Trust [requirement of section 12AA(1)(a). In the present case, the Trust being an educational inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 12A of the Act as it was applicable). The assessee has filed the copies of the assessment order for the A.Ys. 2005-06 2008-09 and it is seen that though the assessment proceedings were completed u/s. 143(3), not a single whisper is there in those orders in respect of the alleged violation of Sec.13(1)(c). The entire impugned order is only merely based on unsupported allegation and shows the excess use of power. There is not a whisper regarding the object of the trust and activities which are to be seen in the context of the objects of the trust which are not alleged to be genuine. The basic purpose of Sub-section (3) of Sec. 12AA is to check the mis-use of the exemption under the pretext of carrying out the charitable activities when the same are not so. The CIT(A) has to make out clear case for exercising the powers u/s. 12AA(3) of the Act. Unfounded and baseless allegation without any evidence are of no use. The CIT could have himself carried out the investigation to prove that the activities of the assessee are not genuine or not in accordance with the object. So far as the object of the trust is concerned, nowhere it is disputed that the assessee is engaged in imparting t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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