2015 (6) TMI 531

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....ct'). 2. The respondent-assessee - Sri Kuthethur Gururajachar Charities was granted registration under Section 12A of the Act on 10.7.1994 by an order passed by the Commissioner of Income Tax. Subsequently, a notice came to be issued on 6.10.2010 as to why registration under Section 12A of the Act should not be revoked by invoking the provisions of Section 12AA(3) of the Act by the authorities. In response to the said notice, the assessee filed its written submission and contested the matter. The authorities took note of the fact that for the assessment year 2010-11 excess of income over expenditure is at Rs. 3,12,000/ and excess of income over expenditure is only 19.35% of the gross receipts. 3. The Director of Income Tax (Exemption)....

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....the assessee are not genuine and not carried in accordance with the objects of the Trust. Accordingly, the Tribunal by its impugned order dated 20.2.2013 has allowed the appeal against which the present appeal is preferred by the revenue. 5. The substantial questions of law which arise for our consideration are as follows: (i)                    Whether the Tribunal was correct in holding that the assessee is entitled to continue registration under Section 12A of the Act, without appreciating the fact that, in view of the amendment to Section 2(15) of the Act, the activities carried on by the assessee were commercial in nature and therefore cannot be....

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....r the assessee contended that once a person is granted registration under Section 12A of the Act, the said benefit could be denied only if the case falls under Section 12AA(3) of the Act. Admittedly, the case of the assessee does not fall under the aforesaid provision. Even if the activities carried on by the assessee ceases to be a charitable purpose in view of the amendment brought about to the definition of 'charitable purpose' under Section 2(15) of the Act, it is a matter to be considered by the assessing authority to extend the benefit of exemption or not and sought to justify the impugned order passed by the Tribunal. 8. We have given our thoughtful consideration to the rival contentions urged by the parties to the lis and i....

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....sfied, the registration granted under the provisions of Section 12A of the Act could be cancelled by the authorities. 10. It is not in dispute that the Director of Income Tax (Exemptions) has not recorded any such finding about the violation of the two conditions stated above. The Tribunal while deciding the matter has rightly recorded a finding that a perusal of impugned order shows that Director of Income Tax (Exemptions) has not arrived at any such finding. The fact that the receipts from commercial activities are more compared to the overall receipts of the charitable organization can neither lead to the conclusion that the activities of the trust or institution are not genuine nor it can be said that the activities of the trust or ins....