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TMI Blog2015 (1) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of first proviso to Section 2(15) of the Act. That is not a ground specified in the statute for cancellation of the registration. In fact, Sub-section (8) of Section 13 of the Act which is introduced by Financial Act, 2012 which came into effect from 1.4.2009 categorically provides that, nothing contained in Section 11 or 12 shall operate so as to exclude any income from the total income of the previous year or any receipt there of. If the provisions of the first proviso to clause (15) of Section 2 becomes applicable in the case of such person in the said previous year, the statute has protected the interest of the revenue. Notwithstanding the fact that the assessee is conferred registration under the provisions of Section 12A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct should not be revoked by invoking the provisions of Section 12AA(3) of the Act by the authorities. In response to the said notice, the KHB filed written submission on 25.3.2011 and contested the matter. The authorities took note of the fact that the accounts for the year ending 31.3.2009 shows receipts by way of sale of houses/sites to an extent of ₹ 226,90,11,264/- and excess of income over expenditure at ₹ 21,62,52,560/-. The extract of income and expenditure account for the financial year 2008-09 is reproduced as under: Particulars Income Schedule As on 31.3.2009 Rs. Sales 13 226,90,11,264 Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering any services in relation to trade, commerce or business and therefore, the consideration received irrespective of the nature of use or application, or retention, of the income, from such activity would take the case out of Section 2(15) of the Act and after referring to the various judgments, the Director of Income Tax (Exemption) has cancelled the registration. Aggrieved by the said order, the assessee filed an appeal ITA No. 1049/2011 before the Tribunal. 4. The Tribunal after considering the entire material on record recorded a finding that the registration granted under Section 12A of the Act cannot be revoked on account of commercial activities by the Board in pursuing the advancement of objects of general public utility and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009. The activities carried on by the assessee is in the nature of purchase and sale of sites/houses, providing housing facilities to all under the LIG, MIG and HIG categories followed with basic infrastructure facilities like asphalting roads, electricity and drinking water supply, adequate sewage and drainage system including commercial complexes, commercial plazas planned with provision for retails outlets, entertainment zones and small offices. The maintenance of these amenities lies with KHB until it hands over the Scheme to the local Municipal Authority. activities exceeds ₹ 25,00,000/- and therefore, it squarely falls under the first proviso to Section 2(15) of the Act. Therefore, it ceases to be an institution for charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 subsection shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.] 9. A plain reading of the aforesaid provision makes it very clear that a registration granted under Section 12A of the Act can be cancelled under two circumstances i.e., (i) If the activities of such trust or institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... introduced by Financial Act, 2012 which came into effect from 1.4.2009 categorically provides that, nothing contained in Section 11 or 12 shall operate so as to exclude any income from the total income of the previous year or any receipt there of. If the provisions of the first proviso to clause (15) of Section 2 becomes applicable in the case of such person in the said previous year, the statute has protected the interest of the revenue. Notwithstanding the fact that the assessee is conferred registration under the provisions of Section 12A of the Act, unless the assessee falls within the provisions of Section 2(15) of the Act, excluding the first proviso, the assessee would not be entitled to the benefit of exemption from the tax. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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