TaxTMI 
TaxTMI 
2014 (6) TMI 367
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....se and in law, the ld DIT(E), erred : (a) in withdrawing /cancelling the registration u/s 12AA of the Act by treating the appellant trust as being for non-charitable purpose; (b) In holding that the activities and object of the trust are not for charitable purpose and thereby erred in holding the trust has become nongenuine; (c) in holding that the activities of the appellant trust are in the nature of business and there is a contravention of the provisions of section 2(15) read with proviso and the reasons assigned for doing so are wrong and contrary to the facts and circumstances of the case, provisions of the Income Tax Act, 1961, and the Rules made thereunder 3. On the facts and in the circumstances of the case and in law, the ld DIT(E)failed to appreciate: (a) that the object and activities of the appellant is for the benefit of under privileged class of people and falls with the meaning of "relief of the poor" referred to in section 2(15) of the Act; (b) that the CBDT has vide circular No.11/2008 dated 19.12.2008 clarified that newly inserted proviso to section 2(15) will not apply in respect of the first three limbs of section 2(15) i.e. relief of the poor,....
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....e assessee has filed detailed reply objecting its cancellation of registration which is dated 24.11.2011 and a copy of which is placed at pages 1 to 6A of the paper book. After considering the submissions made in the aforementioned reply, ld. DIT(E) after referring to the provisions of section 2(15) of the Act, in which proviso were added with effect from 1.4.2009 has come to the conclusion that the activities of the assessee trust were in the nature of trade, commerce or business etc and since its receipts are in excess of monetary limit laid down in the aforementioned proviso there is contravention of provisions of section 2(15) r.w. proviso which has come into effect from 2009-10. He also observed that once a charitable trust/institution is hit by the aforementioned proviso, then there is deeming provision that such entity shall not be for a charitable purpose and then obviously there is change in the status of such person and no longer it can be held to be charitable purpose. The ld. DIT(E) has also observed that once it is held that assessee is not for charitable purpose then trust itself becomes non-genuine as it looses its status of public charitable trust and accordingly th....
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.... After considering the provisions of Act and various submissions of the department and the assessee, the Tribunal has concluded that registration granted u/s 12A could not be reviewed or withdrawn since there is no stipulation in 12AA(3) regarding satisfaction to be reviewed and withdrawn in absence of stipulation in section 12AA(3) regarding continued satisfaction. Where the activities of institution were genuine and were being carried out in accordance with objects of trust, registration granted could not be withdrawn in view of amended provisions of section 2(15). 6. Ld. AR submitted that the similar proposition has been laid down by the decision of Mumbai Bench of the Tribunal in the case of M/s Vanita Samaj V/s DIT(E) in ITA No.1034/Mum/2012, (AY-2009-10) dated 26.2.2014. Copy of the decision was placed before us and also given to ld. DR. 7. In addition to the above decisions the assessee also relied on the following decisions : a) Shri Nashik Panchvati Panjarpole V/s DIT(E) in ITA No.1198/Mum/2012 (AY-2009-10) dated 26.3.2014; b) Cotton Textiles Exports Promotion Council V/s DIT(E) (2014) 44 Taxmann.com 168 (Mum-Trib); c) Prithviraj Kapoor Memorial Trust & Researc....
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....is only upon being satisfied about the objects of the applicant, as well as about the genuineness of its activities that the Commissioner is obliged to register a trust/institution as charitable, by an order in writing, being also required to do so where not so satisfied. Clearly, the satisfaction qua the 'objects' is only with regard to their being for a charitable (or religious) purpose/s. It cannot but be otherwise; the registration being only toward the applicant being a public charitable trust or institution under the Act. This, in fact, is the edifice or the terra firma on which provision rests. As such, even though the registration certificate or the communication in its respect may not, or is not required to, contain an explicit finding or mention as to the satisfaction with regard to the objects of the trust or institution being for charitable purpose/s, that is the basis upon which, or a condition precedent to the grant of the status of a public charitable entity in-so-far as the Act is concerned, that the registration thereunder confers. 7.2 Coming to the ingredients of section 12AA(3), the Commissioner has again to be satisfied with regard to the activities b....
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.... of registration in December, 2011 w.e.f. A.Y. 2009-10, i.e., as sought to be done by him, the same (the cancellation of registration) is not sustainable in the instant case in view of the limited mandate of section 12AA(3), which we have found to exclude a condition of continuing satisfaction by the Commissioner as to the objects being or, rather, continuing to be, for charitable purpose/s. That is, such a satisfaction, though a primary condition for grant of registration, has been found to be outside the scope of the review by him u/s.12AA(3) of the Act, provided of course the objects themselves remain unchanged. The first proviso to the provision (s.2(15)), it would be noted, does not impinge directly on the objects per se, but the manner in which those are to be attained or achieved, and herein lies the controversy or the dichotomy attending the respective view points of the assessee and the Revenue. The review of registration subsequent thereto, as spoken of by the tribunal in Mumbai Cricket Association (supra), is only in terms of and subject to the mandate of section 12AA(3), and which thus would be of no assistance to the Revenue. We may further add, even as clarified by th....
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.... it was granted registration under section 12A of the Act and there is no change in the nature of activities of the Trust since then. It is not the case of the DIT (Exemption) that the activities of the Trust are not genuine; in fact the DIT (Exemption) assumed that by virtue of the first proviso to section 2(15) of the act the activity of the Trust should be treated as not genuine overlooking the fact that there is no change in the activity so as to invoke provisions of sub-section (3) of section 12AA of the Act. In our considered opinion, on a conjoint reading of the first proviso with second proviso to section 2(15) of the Act, a Trust can be denied exemption in the year where the gross receipts exceed the limit prescribed in the second proviso to section 2(15) and in all other years income from such activities should be considered for the benefits under section 2(15) if it is within the limit provided therein. If it was to be interpreted that once the income of the trust in one year crosses the limit provided in the second proviso, the registration originally granted has to be cancelled, it makes the second proviso redundant for the years where the receipts are less than the sp....