TaxTMI 
TaxTMI 
2023 (9) TMI 1019
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation since inception u/s 12AA(3) of the Act is illegal and not valid. Therefore, the Ld. Counsel submits that as the order passed by the PCIT cancelling the registration was held to be illegal and not valid, the order granting registration u/s 12AA to the assessee got restored and, therefore, the reassessments made by the Assessing Officer u/s 143 r.w.s. 147 denying exemption u/s 11/12 will not survive. 3. Ld. DR supported the orders of the authorities below. 4. Heard rival submissions, perused the orders of the authorities below and the decision of the Tribunal in ITA No. 6054/Del/2018 dated 03/09/2020. The assessee is a charitable trust and was established in the year 2003. The assessee was granted registration u/s 12AA on 02/04/2005. The Ld. PCIT vide order dated 01/03/2016 withdrew the registration granted to the assessee u/s 12AA of the Act on 01/03/2016. Assessee challenged the order of the Ld. PCIT in withdrawing registration u/s 12AA of the Act and the Tribunal by order dated 03/01/2017 set aside the order of the Ld. PCIT passed on 01/03/2016 and restored the proceedings to the Ld. PCIT to decide afresh. The Ld. PCIT thereafter passed order on 27.10.2017 cancelling t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ege and thereby seeking to claim exemption on the income so generated under section 11 and 12 of the I.T. Act. It is further noted that due to nexus of corruption by way of bribe and criminal misconduct by the assessee trust, registration of the trust was can ceiled since inception u/s 12AA(3) of the Income Tax Act; 1961. A Charitable trust conduct must be at par with its provision of trust deed and as, per existing law. Its misconduct and desire * to defy rules and norms have been exposed by virtue of the bribe activities. Such incidents cannot be classified as charitable by any reckoning. Such organizations which do not carry any charitable activity cannot be granted registration. In these facts & circumstances, I am satisfied that the activities of the trust axe not genuine and not being carried out in accordance with the objects of the trust. Accordingly, after affording reasonable opportunity to the trust, registration granted u/s 12A vide order dated 02.04.2005 to the assessee trust is cancelled since inception." 38. In the background of ail these developments, the case of the assessee is being examined. 39. The aims & objects of the trust are as under: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h for career and job opportunities and seek coordination and cooperation of educational institutions for the purpose. xiii) To set up and run or assist the setting up and running of Adult education centres and coaching centers for moral upliftment, educational skills towards self reliance. xiv) To grant stipend, scholarships or any other assistance or otherwise to deserving students or scholars in the field of education with special emphasis on the following specialties Medicine, Pharmacy, Computer Science, Engineering, Agriculture Environmental sciences and banking. The trustees reserve the right to grant stipends or scholarships in any field of Education that they deem fit in any part of India. xv) To lift the poor from the curses of poverty, hunger, illiteracy and diseases by starting and carrying out concentrated and intensive programmes. 4. i) To borrow, raise loans from any person, bank or financial institution in such a manner as the Trustees shall think proper or convenient for the furtherance of objects of the Trust and for this purpose the Trustees may secure repayment of these loans. To reach this objective Trustees will always try to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sioner or] Commissioner and the [Principal Commissioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shad be passed before the expiry of six months from the end of the month in which the application was received under clause (a) [or clause (aa) of sub-section (1)] of section 12A.1 [(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]] and subsequently the [Principal Commissioner or] Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of bei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le purpose" includes relief of the poor, education, [yoga,] medical relief, [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest,] and the advancement of any other 69 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 application, or retention, of the income from such activity, unless- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous years do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year;]]" 44. The Ld. PCIT, did not have record....