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of <h1>Tribunal overturns registration cancellation under Income Tax Act, citing genuine activities and trust alignment.</h1> <h3>M/s. Bangalore Metropolitan Transport Corporation Versus. The Director of Income Tax (Exemptions), Bangalore.</h3> M/s. Bangalore Metropolitan Transport Corporation Versus. The Director of Income Tax (Exemptions), Bangalore. - TMI Issues:Cancellation of registration under Section 12AA(3) of the Income Tax Act, 1961.Analysis:The judgment involves the cancellation of registration granted to the appellant under Section 12AA of the Act by the Director of Income Tax (Exemptions). The grounds for cancellation included the surplus in the financial accounts, provision of buses for casual contracts, chartered services, and permitting commercial advertisements on its fleets. The appellant objected to the cancellation, arguing that it was existing for general public utility and not for trade, commerce, or business purposes. The appellant relied on a decision by the Karnataka High Court in a similar case favoring the appellant.The Departmental Representative supported the cancellation, citing the dismissal of the appellant's SLP by the Supreme Court in a different case. The Tribunal analyzed the case based on the provisions of Section 12AA(3) of the Act and the relevant judicial pronouncements. It referred to the decision of the Hon'ble High Court of Karnataka, which stated that registration could only be cancelled if the activities were not genuine or not carried out in accordance with the trust's objects. The Tribunal found that in the present case, there was no violation of these conditions. Additionally, the Tribunal observed that the amendment to the first proviso of section 2(15) of the Act was not a ground for cancellation of registration under Section 12AA(3) of the Act.The Tribunal concluded that the cancellation of the appellant's registration was not sustainable based on the legal provisions and precedents cited. It held that the impugned order of cancellation was not valid and allowed the appellant's appeal. The judgment was pronounced in open court on 20th Feb., 2015.
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