TaxTMI 
TaxTMI 
2016 (7) TMI 136
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....bly explained as per accompanying condonation petition of delay. The ld. DR raised no objection if the delay of condonation is considered. Hence, we condone the delay and proceed for hearing the appeal. 3. Solitary ground raised by assessee in this appeal is that Ld. CIT erred in rejecting the registration application u/s 12AA of the Act on account of delay in filing the registration application and holding that the activities of the assessee are non charitable. 4. Facts in brief are that assessee-applicant is a Development Authority constituted u/s. 11 of the West Bengal Town and Country (Planning & Development) Act, 1979 and engaged in the activities of developing the public utilities. The assessee-trust upto including Assessment Year 2003-04 was claiming the exemption u/s. 10(20A) of the Act. However, the Section was omitted by Finance Act 2002 with effect from 01.04.2003. Thereafter assessee submitted the registration application u/s 12A of the Act on 19.03.2009. During the course registration proceedings, Ld. CIT observed that assessee has declared following income in the earlier years:- Items of income: Year ended 31-03-2008 Year ended 31-03-200....
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....of State Government. The Ld. AR further submitted that after the amendment made in the Finance Act 2007, it is necessary for the trust / institution to file registration application u/s 12A of the Act within one year from the date of its creation or establishment, whichever is later. If it is filed on or after 01.06.2007 the exemption shall be available u/s. 11 and 12 of the Act on prospective basis. The Ld. counsel for the assessee further submitted that the expression incorporated u/s 2(15) of the Act that the object of public utility is not restricted to the objects beneficial to the whole mankind and object beneficial to the section of the public is an object of general public utility. It is sufficient if the intention is for the benefit of the section of the public as distinguished from specific individuals. Finally the ld. AR requested the Bench that the issue may be decided on merit. On the other hand, L'd DR submitted that the application for registration is filed delayed. The ld. DR further submitted that as per the proviso to Sec.2(15) of the Act the activities of the assessee-trust are in the nature of commerce and trade and therefore the assessee-trust is not to enti....
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....prospectively from the financial year in which the application has been made. In this connection, we are of the considered view that L'd CIT is not supposed to done the delay for registration application but should grant the registration on prospective basis. In our considered view, the action of L'd CIT for rejecting the registration application on the ground that it is filed late is not correct. It is because, L'd CIT has power to grant registration prospectively. Now coming to the issue that the activities of the assessee-trust are in the nature of trade, commerce or business, we find that various benches ITAT have decided this issue in favour of assessee. Reference in this connection is made to Chandigarh Bench in the case of Punjab Cricket Asociation v. CIT (2016) 65 taxmann.com 239 (Chandigarh -Trib) 157 ITD 227 (Chan) wherein the head note:- ÏT: Commissioner is empowered to cancel registration granted to a society under section 12A from assessment year 2011-12 onwards, he cannot assume such power for earlier assessment years; IT: Consideration of first proviso to section 2(15) has no role to play in matters relating to registration of a trust or instit....
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....ters relating to registration of a trust or institution under section 12A or 12AA - whether in respect of granting or declining of a registration or in respect of cancellation, even if otherwise permissible, of a registration. A closer look at the scheme of the Act would unambiguously show this aspect of the matter. 11. Let us begin by taking a look at Section 2(15) which defines charitable activities and first and second provisos thereto. These statutory provisions are as follows: (15) "charitable purpose" includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places orobjects of artistic or historic interest,] and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or app....
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....general public utility" as charitable purpose provided that it does not involve carrying on of any activity in the nature of trade, commerce or business. 2nd 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 year and not a charitable trust in another year depending on the aggregate value of receipts from commercial activities. There is, therefore, need to expressly provide in law that no exemption would be available for a previous year, to a trust or institution to which first proviso of sub-section 2(15) become applicable for that particular previous year. However, this te....