Trust's Registration Cancellation Upheld for Non-Compliance with Charitable Objectives

The Tribunal dismissed the applicant's request for rectification of the order dated 03.02.2016 under section 254(2) of the Income Tax Act, upholding the cancellation of registration u/s.12A of the Act due to the trust's activities not aligning with its objects. The denial of exemption was upheld as the trust was deemed non-genuine for charitable purposes. The Tribunal emphasized compliance with legal provisions and found no mistake in its original order, rejecting the application for rectification.

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Issues:
1. Rectification of mistake in the order passed by the Tribunal under section 254(2) of the Income Tax Act, 1961.
2. Cancellation of registration u/s.12A of the Act.
3. Denial of exemption u/s.12A of the Act.
4. Applicability of law and compliance with legal provisions.
5. Timeliness of passing the order by the Tribunal.

Rectification of Mistake in Tribunal's Order:
The assessee filed an application under section 254(2) of the Income Tax Act seeking rectification of the order dated 03.02.2016 passed by the Tribunal in ITA 2658/M/2012. The applicant argued that the Tribunal's order was wrong against law and facts and should be recalled. However, the Tribunal clarified that it can rectify only apparent mistakes and not review its own order or reach a different conclusion. The Tribunal found no apparent mistake in the order and dismissed the application as the applicant sought to change the conclusion already drawn by the Tribunal.

Cancellation of Registration u/s.12A of the Act:
The registration of the trust was cancelled by the DIT(E) on 01.03.2012 for the period w.e.f. 2009-10. The Tribunal upheld this cancellation based on the finding that the activity of the trust was not in accordance with its object. The DIT(E) specified that certain activities of the trust did not qualify for exemption u/s.11 of the Act, indicating a nature of trade, commerce, and business. The cancellation was not solely due to exceeding the permissible limit of receipts but also for not working in accordance with the trust's objects. The Tribunal highlighted the deeming provision under section 2(15) of the Act and confirmed the cancellation based on non-genuine charitable status.

Denial of Exemption u/s.12A of the Act:
The applicant argued that the exemption under section 12A of the Act could not be denied solely based on exceeding the threshold limit of receipts. The Tribunal clarified that the denial of exemption was due to the trust's activities not being in accordance with its objects, as evidenced by trading-like activities. The cancellation of registration was upheld as the trust was deemed non-genuine for charitable purposes under section 12AA(3) read with section 11 of the Act.

Applicability of Law and Compliance:
The Tribunal considered the law relied upon by the applicant, including relevant case laws, but concluded that the cancellation of registration was not solely based on excess expenditure but also on the trust's failure to work in accordance with its objects. The Tribunal found no mistake in its order dated 03.02.2016 and dismissed the application for rectification.

Timeliness of Passing the Order:
The applicant contended that the Tribunal did not pass the order within the 90-day period, but the Tribunal clarified that necessary administrative clearance had been taken, and the order was passed on 03.02.2016. The Tribunal found no merit in this contention and dismissed the miscellaneous application under section 254(2) of the Income Tax Act.

In conclusion, the Tribunal dismissed the applicant's request for rectification of the order dated 03.02.2016, upholding the cancellation of registration u/s.12A of the Act based on the trust's activities not aligning with its objects. The denial of exemption was due to the trust being deemed non-genuine for charitable purposes. The Tribunal emphasized compliance with legal provisions and found no mistake in its original order, thereby rejecting the application for rectification.

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