TaxTMI 
TaxTMI 
2016 (6) TMI 499
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.... constitution/ main objects of the appellant and also erred in holding that some of the objects are not charitable, which finding of the fact, is perverse and contrary to the record and hence, may kindly be quashed. 3. The Id. CIT, Jaipur-I, Jaipur erred in law as well as on the facts of the case in invoking and applying the provisions of Sec.12AA(3) of the Act in this case, which is bad in law and on facts of the case and hence, the invoking of the said provisions be quashed. 4. The Id. CIT, Jaipur-I, Jaipur erred in law as well as on the facts of the case in withdrawing & cancelling, the registration already granted u/s 12A(a) vide certificate dated 02/09/1988, by invoking Sec.12AA(3) of the Act for and from A.Y. 2005-06 and onward. The said withdrawal & cancellation of the registration is bad in law and on facts of the case and hence, the registration already granted, please be restored. 5. The Id. CIT, Jaipur-I, Jaipur further erred in law as well as on the facts of the case in invoking and applying the proviso below Sec.2(15) of the Act for and from A.Y. 2009-10 and onward, which is bad in law and on facts of the case and hence, the application of the said proviso be qua....
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....l of registration u/s 12AA(3) and had directed a fresh consideration of assessee's case for registration u/s 12AA in view of extensive amendments effected by it to its memorandum, by laws, etc. in accordance with law. As per directions of Hon'ble ITAT the case was fixed for hearing with Shri Shri Fazlure Rehman on 29.11.2012 and also considered the written reply dated 26/11/2011 alongwith paper book containing memorandum of RCA and activities etc. 2.2 The Department also filed appeal before Hon'ble High Court challenging the order of Hon'ble ITAT dated 13.07.2012. The Hon'ble High Court, Rajashtan in DBIT Appeal No. 255/2012 order dated 23.01.2013 had decided and observed as under:- "The prayer is allowed. The appeal is, accordingly, dismissed as withdrawn with observation that while considering application afresh, the assessing officer will not be influenced by any observation of appellate authority or the Income tax Appellate Tribunal''. The assessee's argument has been summarized by the ld CIT(A) as under:- (1) No substantial amendments made - most of amended clauses in 2005, are nothing but a re-drafting, modifying the main objects, keeping in mind the changing scenario, ....
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....h for registration U/s 12A of the Act after amending the object of the Trust. It is necessary to intimate the change and also applied for fresh registration. It is the basic principles of law that the registration is granted on the basis of object of an Institution. If there is change in the objects, the registration would not survive. After such an event, if the institution does not want to communicate the changes, the only consequence is that the benefit of registration will not be available. It is not necessary that every society should be registered under the I.T. Act. It can function without getting registered under the IT Act. It is only when an institution wants to avail exemption as charitable institution that registration is required under the Act. He further held that most of the objectives were amended and added. New objects were added as indicated in the object of memorandum 2005, which is very substantial in nature. He particularly referred clause (s) of object, 2005 "to receive monies and donations from any person/s clubs associations or institutions and to utilize and/or invest the same in any manner and for any purpose as per the decision of the Executive Committee.....
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....d to the competent authority. The assessee is not allowed to get benefit of registration and it automatically also deemed cancelled. Therefore, the assessee has to seek a fresh registration on the basis of amended memorandum of rules. 2.3 The assessee submitted before him that its activities are not commercial in nature and the Hon'ble ITAT has decided that on the basis of commercial activities, the withdrawal of registration is not a good basis for rejection of registration. It was the matter relating to application of income, which could be examined only at the time of assessment. The ld CIT held that these observations made by the ITAT has been modified by the Hon'ble Rajasthan High Court and directed to the Assessing Officer not to influence by any observation made by the appellate authority or ITAT. 2.4 He further held that activity of the RCA is commercial in nature, where profit making is the predominant object of the activity, the trust would lose exemption as a charitable trust. It is a fact that the trust activity is being carried out with no profit motive and receipts of the trust are balanced with the expenditure but whatever service provided by the trust is to be val....
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....gaged in promotion of cricket and further amended objects did not make assessee's objects any where non-charitable. All along assessee's activities have remained intra vires and not ultra vires even after considering the amended objects of the assessee, the assessee's activities are charitable. The ld AR further relied on the decision of Hon'ble Delhi High Court in the case of Mool Chand Khairati Trust 377 ITR 650 wherein the Hon'ble High Court considered the issue of following any other system of medicine for improving the Ayurvedic system of medicine and running an allopathic hospital. The Hon'ble High Court has held that the assessee had applied its income for the purpose of other than its objects, which was the base of holding that the trust is not charitable. A plain reading of object indicates that it includes "devising means for imparting education and improving Ayurvedic system of medicine and preaching the same." He further relied on the decision in the case of Lakshmanaswami Mudaliar Vs LIC, AIT 1963 SC 1185 wherein the Hon'ble Supreme Court has held that power to carry out an object, undoubtedly includes power to carry out what is incidental or conducive ....
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.... of the Trust are not genuine or are not being carried out in accordance with the object of trust or trusts as the case may be. Therefore, he prayed to allow the assessee's appeal. 4. At the outset, the ld CIT DR has vehemently supported the order of the ld CIT and argued that the RCA's activities are commercial and by considering the amended provisions of Section 2(15), the activities of the trust are in nature of commercial, trade and business and element of profit is involved. Therefore, the assessee's appeal may please be dismissed. 5. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that the assessee was granted registration U/s 12A on 25/11/1988, which has been withdrawn twice by the ld CIT. The issue has been set aside by the Coordinate Bench to reconsider the withdrawn of registration, which was also challenged by the revenue before the Hon'ble Rajasthan High Court, who has allowed the assessee's prayer and directed to consider the application afresh without influencing any of the observation made by the appellate authority. The assessee has been provided reasonable opportunity of being hea....