Tribunal reinstates charitable status for Rajasthan Housing Board despite withdrawal, emphasizing annual assessment.

The Tribunal found that the withdrawal of registration granted under section 12AA to M/s Rajasthan Housing Board was unjustified by the CIT. Despite amendments to section 2(15) of the Act, the Tribunal held that the Institution's objectives remained charitable, reinstating the registration. Emphasizing that the exemption under section 11 is assessed annually and does not affect the registration process, the Tribunal allowed the appeal and dismissed the Stay Petition as unnecessary.

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Issues:
Withdrawal of registration granted u/s 12AA w.e.f. Assessment Year 2009-10.

Analysis:
The appellant, M/s Rajasthan Housing Board, was granted registration u/s 12AA in 2009. The CIT withdrew the registration due to an amendment in section 2(15) of the Act, stating that the Institution no longer qualified as a charitable institution. The appellant argued that the Tribunal had already considered the effect of the amendment while granting registration. The Tribunal found that the withdrawal procedure is provided under sub section (3) of section 12AA, which is different from the provisions of section 2(15). The Tribunal held that the CIT was not justified in withdrawing the registration, as the objectives of the Institution remained charitable. Citing similar cases, the Tribunal concluded that the CIT's decision was incorrect and restored the registration granted u/s 12AA.

The amended provisions of section 2(15) stated that if an institution's receipts exceed Rs. 10 lakhs, then exemption u/s 11 may not be allowed. The Tribunal clarified that the exemption u/s 11 is to be examined yearly and has no impact on the grant of registration u/s 12AA. The Tribunal noted that the objectives of the Institution had been previously examined and found to be charitable. Therefore, the withdrawal of registration was deemed unjustified.

In similar cases, the Tribunal found that the withdrawal of registration based on amended provisions of section 2(15) was not justified. The Tribunal emphasized that the CIT's decision did not align with the permissible limits of section 12AA(3) and reinstated the registration. Consequently, the Tribunal allowed the appeal of the Institution and dismissed the Stay Petition as infructuous.

In conclusion, the Tribunal held that the CIT's withdrawal of registration was unwarranted, as the Institution's objectives remained charitable. The Tribunal reinstated the registration granted u/s 12AA, emphasizing that the exemption u/s 11 is to be assessed yearly and does not impact the registration process.

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