TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 1102
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Section 12AA(3) of the Income tax Act with effect from A Y 2009-10. Without prejudice to the generality, the learned Director of Income Tax (Exemptions), besides holding that no attendance was made on the date of hearing of the show cause notice by disregarding specific request made in the reply to the show cause notice, has, on the merits of the case and as per the records, erred in: a) Assuming jurisdiction under Section 12AA(3) of the Act; b) Holding that the assessee Trust has become non-genuine for the purpose of Section 11 of the Act; Your appellant prays for the leave to add to or alter or amend the above grounds, if necessary. Brief facts of the case: 2. As per the Director of Income-tax-Exemption, Mumbai(DIT-E), he recei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re of any trade/commerce/business then all actions of such a trust were covered by the aforesaid proviso. He further held that in the assessee's case there were clear-cut earnings which was shown as income by way of Goodwill from Caterers of Rs. 50.12 lakhs and additional facilities charges for Rs. 116.79 laks, that such receipts were in excess of Rs. 10 lacs, that the assessee was receiving income towards commercial exploitation of its property in a systematic manner which was nothing but a business income, that the assessee trust was directly hit by the proviso to section 2(15) which had been introduced from AY. 2009- 10, that once a charitable trust was hit by aforesaid proviso there was change in the status of such trust and it was to b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted the order of the DIT-E. 4. We have heard the rival submissions and perused the material before us. Undisputed facts of the case under consideration are that the assessee-trust was granted registration on 01 .04.1981, that DIT-E, vide his order dtd.28.12.2011withdrew the registration granted to it for the year 2009 - 10, that the amended provisions of section12AA(3)were effective from AY.2011-12.We are of the opinion that the DIT(E) could cancel the registration granted u/s.12A of the Act by invoking the provisions of section 12AA(3) of the Act only if he was satisfied that the activities of the trust were not genuine or the activities of the trust were not being carried out in accordance with the objects of the trust, that section 12AA....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... can be cancelled by the Commissioner after providing the trust or institution an opportunity of being heard. 7.2. The power of cancellation of registration is inherent and flows from the authority of granting registration. However, judicial rulings in some cases have held that the Commissioner does not have the power to cancel the registration which was obtained earlier by any trust or institution under provisions of section 12A as it is not specifically mentioned in section 12AA. 7.3. Therefore, section 12AA has been amended to provide that the Commissioner can also cancel the registration obtained under section 12A as it stood before amendment by Finance (No.2) Act,1996. 7.4. Applicability-This amendment has been made applicable wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee was granted registration under section 12A of the Act w.e.f. 01.04.2003 and said registration was cancelled by the CIT w.e.f. assessment year 2009- 10. Deciding the appeal, the Tribunal held as under: From the conjoint reading of sub-section (1) clause (b) and sub-section (3) of section 12AA, it would be seen that the cancellation of the registration was provided where the registration was granted under clause (b) of sub-section (1). Further cancellation under sub-section (3) was also provided where the registration was obtained at any time under section 12A [may be under clause (a) or clause (aa) of sub-section (1) of section 12A]. But this power of cancellation of registration obtained under section 12A came to be incorporated ....