TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 1656
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....the Appellant is hit by the proviso to Sec.2(15) and the Appellant will not be for a charitable purpose and the trust itself becomes non-genuine for the purpose of Sec.11 and therefore, the registration allowed to the appellant was cancelled /withdrawn as non-charitable trust. 3. The Director of Income Tax (Exemption) erred in holding that the activities of the trust providing swimming pool facilities for aquatic events and training and facilities for other sports like -squash, billiards, table tennis, etc. are not charitable the Govt. Of Maharashtra gave the lease of the land and the activities relating to canteen for sale of food and drinks are implement its objects contrary to the orders of the Tribunal from AY 1991-92 to 2006-07 and upheld by the High Court in Assessment Year 2004-05. 4. The DIT(E) erred in holding that the proviso to sec. 2(15) applied to the Appellant as main object of the trust is for advancement of any other object of general public utility which are in the nature of trade, commerce, business for a cess or fee or any other consideration irrespective of the nature of use or application or retention of the income form such activities and accordingly, rece....
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....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 application, or retention, of the income from such activity. Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lac rupees or less in the previous year." 5. In view of the above the DIT(Exemption) cancelled the registration with effect from AY 2009-10 by observing that the assessee club in view of the provision to section 2(15) of the Act is engaged in the commercial activity and receipts thereof are far and excess as prescribed in the proviso. The DIT(Exemption) after considering the relevant proviso cancelled the registration by observing as under: - "The AR in its written submission has submitted that the above mentioned objects and activities were considered by the ITAT in the case of Breach Candy Swimming Pool Trust, following the Bombay High Court judgment in ITA 9039/Mum/92. The appellate authoritie....
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....the purpose of Section II of the I.T.Act, as it looses its public charitable status and accordingly the provision of Section 12AA(3) of the Act gets attracted. As discussed in earlier paragraph that Hon'ble I.T.A.T. in assessee's own case has held that some of the activities as carried out by the assessee cannot be said to be for the object of club. Hence the activities are not in accordance with the objects sought to be pursued by the Institution. Thus in view of the facts and circumstances as discussed above, I therefore, accordingly hold that the assessee trusthas become non genuine for the purpose u/s.12AA(3) read with Section 11 of the I.T. Act, as for allowing exemption the Trust/ Institution should be for charitable / religious purpose, therefore, the registration as allowed to it is hereby cancelled/ withdrawn w.e.f. A.Y. 2009-10 and the assessee trust is accordingly held as non-charitable Trust / institution" Aggrieved, assessee came in appeal before Tribunal against cancellation of registration. 6. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the main activities of the assessee's trust are providing s....
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....epartment has jurisdiction to cancel the registration whenever receipts from commercial activities have exceeded Rs. 25 lakhs. Learned Counsel further submits that the aforesaid Circular would have application only prospectively as it was issued consequent to Finance Act, 2016 which changed the cut-off from Rs. 25,00,000/- to 20% of the total receipts in respect of its commercial activities. It is also submitted that looking at the quantum of receipts on account of commercial activities it is unlikely/ improbable that in the subsequent Assessment Year, the receipts are to fall below Rs. 25 lakhs. Therefore, the Commissioner is entitled to cancel the Registration under Section 12AA (3) of the Act. 10. We find that the Circular No. 21 of 2016 when read as a whole, specifically lists out in paragraphs 4 and 5 reproduced herein above that the Registration granted under Section 12AA could not be cancelled, only when the receipts on account of business exceeded the cut-off, specified in the proviso to section 2(15) of the Act. The jurisdiction to cancel the Registration only arises if there is change in the nature of activities of the institution or the activities of the institution, a....