2011 (12) TMI 579

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....ces of the case the DIT have cancelled the registration u/s 12AA of the Act to the Appellant. 2. Learned CIT has erred in law and on facts in not appreciating that the appellant is an institution utilizing its income for the purpose of general public welfare and its activities are charitable in nature and therefore registration u/s 12A of the Act ought not to have been cancelled by him." 2. The brief facts appearing in the order of DIT (Exemption), Ahmedabad dated 22.01.2010 are reproduced below for the sake of clarity: "The society was granted registration U/S.12AA with effect from 01-04-2005 ( Asst. year 2006-07) by the Director of Income tax(Exemption), Ahmedabad vide order dated 9-11- 2005. Subsequently, it came to light that the a....

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....bmitted a further letter dated 7- 12-2009 wherein he reiterated his earlier submission and stated that the expenses against the income consisted of administrative overheads, salary, employee benefits and other incidental, necessary for providing security services. Explanation to section 2(15) inserted by the Finance Act 2008 applies from 2009-10 and hence according to him the said amendment could not applied for earlier assessment years. Further, he argued that there being no change of circumstances, the authorities cannot depart from previous decisions at Will in the absence of material circumstances or reasons for such departure, he also quoted Rule of consistency (CIT Vs. Siva Springs 304 ITR 24) and principle of mutuality validity appli....

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....ed Assessed Income Tax paid by the assessee 2001-02 Rs. 6,11,420 Rs. 6,45,910 -- 2002-03 Rs. 6,11,420 Rs. 6,45,910 Rs.1,60,575 (TDS) 2003-04 Rs. 20, 75, 850 Rs. 1,21, 33, 893 Rs. 6,26,908 (TDS) 1 2004-05 Rs. 32, 38, 797 Rs. 77,68,627 Mis.10,43,504(TDS) 2005-06 (-)Rs. 1,46, 814 (-) Rs. 1,46, 814 ... The objects of providing employment to youths of rural and urban areas and security services there from is only through employer- employee relationship and there is no beneficiary out of charities carried out by the society. There is no larger public utility except the society operating on similar terms as any other security organizations or corporations. Claim of no profit motive is disproved from the operational results ....

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....en even in the case of public sector undertakings which are serving the public cause at large but are taxable entities. As far as the assessee is concerned, there is no iota of charity in any of the years and the decision of the Hon'ble ITAT Chandigarh Bench 'B' in ITA No. 764/CHD/2003 in the case of Punjab Urban Development Authority is quite relevant wherein it is held as under : - " It was clear that the assessee did not engage itself in any charity and if the assessee developed any institutions of public importance such as schools, community centres, the assessee recouped their cost from the public at large. The objects/activities of the assessee were commercial in nature and they did not involve any charity". Holding thus....