TaxTMI 
TaxTMI 
2015 (1) TMI 155
X X X X Extracts X X X X
X X X X Extracts X X X X
.... charitable. 2. Counsel for the assessee submits that assessee was granted registration under section 12AA of the Act vide order No.DIT(E)No.2(202)/2003-04 dated 24.7.2003. Counsel submits that society was formed with following main objects:- i) To serve as a forum where Engineers, Scientists, Technologists and Innovators in mobility engineering field can exchange ideas and learn from each other experience; ii) To hold, organize technical meetings, workshop, seminars educational programs and specialty conferences to report on the frontline development before they impact the industry; iii) To organize tours, social events and exhibition of latest events related to mobility engineering field; & iv) To encourage the creation, maintenance ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hs i.e. threshold limit as per second proviso to section 2(15) of the Act. Counsel submits that simply because receipts of the assessee are exceeded Rs. 10 lakhs i.e. threshold limit as provided under second proviso, the assessee institution cannot be held as not genuine and it is not charitable organization. He submits that Assessing Officer can deny section 11 if he finds that activities of the assessee are coming within the purview of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business but certainly the registration granted under section 12AA of the Act cannot be withdrawn. Counsel for the assessee further referring to the memorandum explained in Finance Bill, 2012 submits t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be considered as 'education'. The activities of the assessee carried on certainly not fall under 'education'. The activities of the institution will fall under the category of object of general public utility. The main reason for withdrawing registration granted under section 12AA(3) seems to be that the assessee is receiving huge amounts as it is conducting various conferences, baja programmes in promoting objects of the assessee. Director of Income Tax (Exemptions) cancelled registration under section 12AA(3) of the Act stating that objects and the activities of the assessee are falling under general public utility and not education and assessee's commercial receipts exceeding Rs. 10 lakhs i.e. threshold limit as per second proviso to sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvolve carrying on of any activity in the nature of trade, commerce or business. The second proviso to said section provides that in case where the activity of any trust or institution is of the nature of advancement of any other object of general public utility, and it involves carrying on of any activity in the nature of trade, commerce or business; but the aggregate value of receipts from the commercial activities does not exceed Rs. 25,00,000 in the previous year, then the purpose of such institution ~shall be considered as charitable, and accordingly, the benefits of exemption shall be available to it. Thus, a charitable trust or institution pursuing advancement of object of general public utility may be a charitable trust in one yea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot the registration or approval granted or the notification issued is cancelled, withdrawn or rescinded. This amendment will take effect retrospectively from 1st April, 2009 and will, accordingly, apply in relation to the aSsessment year 2009-10 and subsequent assessment years." 6. On reading of the above memorandum explaining proviso in Financial Bill, 2012 the assessment of charitable organization it is understood that in case commercial receipts exceeding the specified threshold, the intention of the legislature is not to cancel the registration under section 12AA of the Act wherever receipts of an institution exceeds threshold limit as specified in proviso to section 2(15) of the Act. 7. The Hon'ble Madras High Court in the case of T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egistration were to be cancelled, it must be only on the grounds stated under section 12AA(3) with reference to the objects accepted and registered under section 12AA, in accordance with the law as it then stood under the definition of section 2(15). Thus, if a particular activity of the institution appeared to be commercial in character, and it is not dominant, then it is for the Assessing Officer to consider the effect of section 11 in the matter of granting exemption to a particular head of receipt. The mere fact that the income does not fit in with section 11 would not, by itself, lead to the conclusion that the registration granted under section 12AA was bad and, had to be cancelled. Therefore, section 12AA(1) must not be read along wi....