TaxTMI 
TaxTMI 
2008 (4) TMI 420
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....e- tax ordered the cancellation. The issue before us is as to whether the cancellation ordered is justified or not. 3. As per learned counsel for the assessee, the learned Commissioner of Income-tax has erred in cancelling the registration, even though no finding has been given on the issue as to whether the registration under section 12AA of the Act can be cancelled only where the activities of the society are not genuine or not being carried out in accordance with the objects of the trust or institution and that the provisions regarding cancellation of registration having been introduced with effect from October 1, 2004, they cannot be invoked retrospectively. Learned counsel for the assessee has contended that each of the alleged irregularities pointed out by the Commissioner of Income-tax was duly replied to by the assessee and that the learned Commissioner of Income-tax erred in cancelling the registration granted to the assessee for the reason of being dissatisfied by the reply filed by the assessee to these irregularities, even though the ingredients of section 12AA of the Act were not fulfilled. 4. The learned Departmental representative, on the other hand, strongly r....
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....appealed, may support the order appealed against on any of the grounds decided against him." 8. The Department, respondent in the present case, has not shown that it is supporting the order of the learned Commissioner of Income-tax, i.e., the order appealed against by the assessee, on any ground decided against the Department. Therefore, there is nothing for the Department to support the order appealed against. 9. In view of the above, the prayer of the Department for allowing it to raise the additional ground is hereby rejected. 10. Coming to the merits of the case, the first issue raised by the assessee is regarding the bank accounts in the joint names of the members of the assessee-society, i.e., Dr. Amarjit Singh Pasricha and Dr. Naresh Pruthi. The allegation of the learned Commissioner of Income-tax was that these bank accounts belonged, in fact, to the society and the deposits therein have been transferred from the books of the society. The response of the assessee was that it had been explained before the Assessing Officer that the accounts had been opened in the personal names of the members of the society, as they were not conversant with the provisions of law and....
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....t there would not have been any embezzlement by both the assessees as the assessee-society being a legal entity, could have taken action against both the asses sees and no such case had been made by the Assessing Officer; that the books of account, in opening of the bank account, would not support the findings of the Assessing Officer that it was unexplained investment in the bank account; that the bank entries had been supported by the books of account of the medical college, and as such, there appeared to be no mistake in the order of the learned Commissioner of Income-tax (Appeals) in deleting the additions made by the Assessing Officer; that no case of unexplained investment or deposit had been made out by the Assessing Officer. In this manner, the Tribunal in the case of Dr. Amarjit Singh Pasricha and Dr. Naresh Pruthi, Muktsar (supra), dismissed the appeal filed by the Department. 10. A perusal of the above orders in Dr. Amarjit Singh Pasricha and Dr. Naresh Pruthi, Muktsar, shows that it squarely covers the issue at hand. No case has been made out by the Department that the funds went to the personal use of the president and the secretary of the assessee-society. Th....
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....mmissioner of Income-tax is just beating about the bush. The learned Commissioner of Income-tax has failed to take into consideration the fact that all the amounts pertaining to these issues are only incoming in the books of the assessee-society and there is no case that these amounts have been utilised for the personal benefits of the members of the assessee-society. 17. Again, no case is made out against the assessee for cancellation of registration. 18. The next issue raised by the learned Commissioner of Income-tax was that interest amounting to Rs. 2,59,002 had not been declared by the assessee in the income and expenditure account for the assessment year 2002-03. The assessee's response was that this interest on FDRs stood disclosed in the assessment year 2003-04, though, actually, it stood so disclosed in the assessment year 2002-03; that it was only a technical mistake; that the interest had been disclosed in the assessment year 2003-04 voluntarily; and that it was not the case of the Department that interest income had been disclosed in the assessment year 2003-04 after the lapse having been pointed out. This was also not accepted by the learned Commissioner of I....
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....ee maintained that the minute book for the assessment year 1998-99 was lost and thus, could not be produced; that a copy of the FIR lodged in this regard had been submitted before the Assessing Officer; and that the salary register, pay bills and the receipt books could not be produced, having been misplaced at the time of shifting from the building. Again, the learned Commissioner of Income-tax did not accept such explanation. 23. The contention of the assessee as aforesaid has not been refuted. A copy of the FIR was duly filed before the Assessing Officer. A copy thereof has been filed before us too. Moreover, again, there is no charge of the Commissioner of Income-tax against the activities of the assessee. Further, it has not been denied that the educational activities in the rural area have been carried out by the assessee-society, which activities had already been challenged. The assessment order for the assessment year 2004-05 was passed on December 18, 2006. A copy thereof is at the assessee's paper book pages 88 to 99. Pertinently, no addition was made by the Assessing Officer, proving the case of the assessee that the activity was carried on in the normal course. F....
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.... been aware of the provisions of law and that the utilisation of the amount of Rs.64 lakhs had already been explained during the assessment proceedings. The learned Commissioner of Income-tax refused to agree with this assertion of the assessee. 28. Once again, the Department has failed to demonstrate as to how this lapse on the part of the members of the assessee would necessarily lead to cancellation of the registration. Undisputedly, the amount in question has not been shown to have been utilised for the personal benefits of the members of the assessee-society. Rather, it has come on record that this amount was utilised for purchase of the assets of the society. 29. The last issue raised by the learned Commissioner of Income-tax was that in the cash book of the assessee for the assessment year 1998-99, a sum of Rs. 5,44,360 had been credited, but no document had been produced before the Assessing Officer to prove the genuineness of the donation. The assessee responded by saying that the details had already been furnished before the Assessing Officer in the assessment proceedings. The learned Commissioner of Income-tax did not accept this. In this regard, pages 91 to 94 of ....
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....t Montessori School [2007] 294 ITR (AT) 149 (Gauhati), it was also held that where there is no material that the society is existing for profit and exemption has been granted in the earlier and succeeding years, reassessment for certain years denying exemption is not justified. 34. In the present case, as discussed hereinabove, no material has been brought by the Commissioner of Income-tax that the assessee-society exists for profit motive. 35. In M. P. Madhyam v. Joint CIT [2004] 89 TTJ (Ind) 770, it has been held that the provisions of section 12AA of the Act are not meant for withdrawal or cancellation of registration already granted ; that the benefit of the principle of promissory estoppel cannot be denied to the assessee enjoying the registration for the last so many years under the same facts and circumstances unless there is a breach of the conditions laid down for granting registration in specific terms; that in such cases, the burden lies heavy on the Department to establish as to how the approach of the assessee was commercial that where the predominent object is to carry out the charitable purpose and not to earn profit, the society would not lose its charitable c....