Trust's Registration Cancelled for Non-Charitable Activities

The Tribunal upheld the Pr. CIT's decision to cancel the registration of the trust under section 12AA of the Income Tax Act, 1961. The appeal was dismissed as the trust's activities were deemed non-charitable and in violation of statutory provisions, leading to the withdrawal of registration. The Tribunal found that adequate opportunities were provided to the assessee before the cancellation, despite their failure to appear at scheduled hearings.

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Issues Involved:
1. Legality of withdrawal of registration under section 12AA(3) r/w section 12 of the Income Tax Act, 1961.
2. Allegation of activities not in accordance with the objects of the trust.
3. Engagement in nefarious activities and violation of section 2(15) of the Act.
4. Jurisdiction and statutory provisions related to the withdrawal of registration.
5. Adequacy of opportunity provided to the assessee before cancellation of registration.

Issue-wise Detailed Analysis:

1. Legality of Withdrawal of Registration:
The appeal was filed against the order dated 27.10.2017 by the Pr. Commissioner of Income Tax (Central)-3, New Delhi, which withdrew the registration granted to the appellant under section 12AA of the Income Tax Act, 1961. The Tribunal examined whether the withdrawal was legally justified. The Pr. CIT observed that the trust was not engaged in genuine charitable activities, leading to the cancellation of registration.

2. Allegation of Activities Not in Accordance with the Objects of the Trust:
The Pr. CIT noted that the trust was involved in activities that were not in accordance with its stated charitable objects. Specifically, the trust was running a medical college and hospital, which was initially registered as a charitable activity. However, the trust was found to be involved in corrupt practices, including the delivery of Rs. 2 crore to the then Chief of the Medical Council of India through a middleman, which violated the charitable purpose.

3. Engagement in Nefarious Activities and Violation of Section 2(15):
The trust was accused of engaging in nefarious activities, such as inducting students without the requisite infrastructure, which violated clause (ii) of para 4 of the trust deed and section 2(15) of the Income Tax Act. The Tribunal agreed with the Pr. CIT's findings that such activities were not charitable and justified the withdrawal of registration.

4. Jurisdiction and Statutory Provisions Related to the Withdrawal of Registration:
The assessee argued that the withdrawal of registration since inception was without jurisdiction and contrary to statutory provisions. However, the Tribunal found that the Pr. CIT had the authority to cancel the registration based on the trust's misconduct and violation of the trust deed and Income Tax Act provisions.

5. Adequacy of Opportunity Provided to the Assessee:
The assessee claimed that no adequate opportunity was provided before the cancellation of registration. The Tribunal noted that multiple notices and opportunities were given to the assessee to present their case, but the assessee or their representatives failed to appear on the scheduled dates. Therefore, the Tribunal concluded that reasonable opportunities were provided.

Conclusion:
The Tribunal upheld the Pr. CIT's decision to cancel the registration of the trust under section 12AA of the Income Tax Act, 1961, since the trust's activities were not genuine and violated the provisions of the trust deed and the Income Tax Act. The appeal filed by the assessee was dismissed, confirming the legality and justification of the withdrawal of registration.

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