Tribunal grants appeal for statistical review, remands registration cancellation issue.

The tribunal allowed the appeals for statistical purposes only, restoring the issue of cancellation of registration to the DIT(E) for a fresh determination considering the amended Section 2(15) of the Act and the decision of the Hon'ble Bombay High Court. The tribunal emphasized the need for a detailed examination of the appellant's activities to ascertain their genuineness and compliance with the trust's objects. The consequential appeal was also remanded to the Assessing Officer for fresh adjudication in line with the DIT(E)'s new decision.

---

---

Issues Involved:
1. Reasonable opportunity of being heard and principles of natural justice.
2. Consideration of binding precedents and facts of the case.
3. Nature of activities as charitable or non-genuine.
4. Retrospective effect of cancellation of registration.

Issue-wise Detailed Analysis:

1. Reasonable Opportunity and Principles of Natural Justice:
The appellant argued that the DIT(E) erred by not granting a 'reasonable' opportunity of being heard as mandated by proviso to Section 12AA(3) and violated principles of natural justice, thereby denying the appellant its right of legal representation. However, this ground was not pressed by the appellant’s counsel and was dismissed as 'not pressed'.

2. Consideration of Binding Precedents and Facts:
The appellant contended that the DIT(E) did not consider the binding precedents cited by the appellant and failed to appreciate the facts of the case. The appellant highlighted that similar activities were considered charitable in nature in previous years and exemptions were granted under Section 11 of the Act by the Revenue and upheld by the Hon’ble Bombay High Court.

3. Nature of Activities as Charitable or Non-Genuine:
The DIT(E) treated the activities of the appellant as non-charitable on the basis of the newly inserted proviso to Section 2(15) of the Act, which came into effect from the assessment year 2009-10. The appellant's receipts from Banquet Hall Hiring Charges, Hospitality (Restaurants), and Permit Room (Bar) exceeded the threshold limit of Rs. 10 lakhs, thus falling under trade, commerce, or business. The DIT(E) cancelled the registration under Section 12AA(3) of the Act, stating that the activities were not genuine and were in breach of the trust's objects.

4. Retrospective Effect of Cancellation of Registration:
The appellant argued that the DIT(E) erred in giving the cancellation of registration a retrospective effect, which was prior to the date of the order and before the authority for passing such an order was vested by the Finance Act 2010. The tribunal noted that the activities of the appellant were consistent and known to the Revenue for several years, and the registration could not be cancelled merely due to the amendment in Section 2(15) of the Act.

Tribunal's Decision:
The tribunal restored the issue of cancellation of registration to the file of the DIT(E) for a de-novo determination on merits, considering the amended Section 2(15) of the Act and the decision of the Hon’ble Bombay High Court in the case of DIT(Exemption) v. North Indian Association. It was emphasized that a detailed enquiry and examination of the appellant's activities over time were required to conclude whether the activities were genuine and in accordance with the objects of the trust.

Consequential Appeal:
The appeal in ITA No.4638/Mum/2013, which was consequential to the cancellation of registration, was also restored to the file of the Assessing Officer for de-novo adjudication in light of the fresh decision to be passed by the DIT(E).

Final Order:
Both appeals, ITA No.602/Mum/2012 and ITA No.4638/Mum/2013, were allowed for statistical purposes only. The order was pronounced in the open court on 18th April 2017.

---