TaxTMI 
TaxTMI 
2008 (12) TMI 192
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....table institution. The opposite parties have granted registration on April 1, 1999. Further, the exemption was also granted under section 80G of the Income-tax Act on May 10, 1999. 4. A survey was conducted at the business premises of the assessee under section 133A of the Act on September 20, 2002, wherein documents were impounded. During the course of survey, the statement of Sri Ajit Pal Chaudhary, the president of the society, was also recorded, On the basis of the information, it was felt by the opposite parties that the society was being run for the purposes of profit and that the president and its family members were also obtaining benefits from it. Therefore, after serving a notice by the impugned order dated March 9, 2004, the earlier registration granted under section 12A of the Act was cancelled. The assessment years in this writ petition are involved 2000-01 and 2001-02. Being aggrieved with the impugned order, the petitioner has filed the present writ petition. 5. The learned counsel for the petitioner has stated that the accounts were properly audited for the assessment years under consideration and the same are available as annexure Nos. 3 and 4 of the writ petitio....
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....petitioner's society on allotment basis for establishing a school at South City, Lucknow, is held up in spite of the fact that the consideration was fully paid. According to him, the registration was granted under section 12A of the Act after a due enquiry as provided under the Act for the assessment years under consideration (2000-01 and 2001-02). There was no jurisdiction with the opposite parties to cancel or withdraw such registration. He submitted that section 12AA(3) came into force with effect from October 1, 2004, by the Finance (No. 2) Act, 2004. The said provision reads as under: "12AA Procedure for registration. - ... (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the 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 being he....
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.... On the other hand Sri D. D. Chopra, the learned counsel for the opposite parties has relied on the impugned order. He stated that in the assessment order for the assessment year 2000-01, it was clearly mentioned that "no books of account, no bill and vouchers could be produced." He submitted that the assessee was not engaged in the charitable activities but all the activities were meant for the benefit of its president Mr. Chaudhary and his family members. During the survey on September 20, 2002, various discrepancies were found in the so-called books of account from which it appears that surplus was quite heavy. There was an unlawful huge margin in the commercial activities run by the petitioner. He read out the impugned order dated March 9, 2004, where it was mentioned that a lot of money was expended for the advertisement in the newspapers to invite the students. The amount was also received from various institutions located in Nepal. Evidence to this extent was found in survey. Not only this evidence has been found in survey but also it was found that Smt. Shandhya Chaudhary had received the amounts from students which was not recorded in the books of account. 12. Learned cou....
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....n Khan [2007] 10 SCC 88. 17. In the instant case, the petitioner is a registered society, which was earlier granted registration under section 12A of the Income-tax Act on April 1, 1999. A survey was conducted at the business premises on September 20, 2002, from where documents were impounded. The registration was cancelled for the assessment years 2000-01 and 2001-02 for the reasons that the surplus was quite heavy. In the impugned order, it was mentioned by the Commissioner of Income-tax that there was an unusual huge margin and the petitioner was engaged in the commercial activities rather than charitable. As per the balance-sheet, huge amount from the student was charged. The profit margin embodied in the charges taken from the students are so huge and it proves the profit motive of the petitioner. The funds were misused by the president and his family members of the petitioner. 18. Before us the issue cropping up is whether the assessee-society is engaged in charitable activities or not. 19. The expressions "charity" or "charitable purposes" do not admit of rigid definition. In order to understand what these expressions legally convey, one can merely enumerate its various a....
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....no power to rescind the order passed earlier by the Commissioner granting registration to the petitioner's society. It may be mentioned that section 12AA(3) was incorporated with effect from October 1, 2004, to empower the Commissioner to cancel the registration granted to a trust or institution. The same is not applicable retrospectively and in the assessee's case for the assessment years under consideration. The object of this provision is not clarificatory or explanatory, so prior to that date, the authorities granting registration had no inherent power to withdraw or revoke the registration already granted. The order cancelling the registration granted to a trust or institution under section 12AA of the Act being a quasi-judicial order does not fall within the category of orders mentioned under section 21 of the General Clauses Act, 1897, which provides that the power conferred on an authority empowers to issue orders including the power to rescind such orders and the Commissioner would not have power to rescind the order passed by the Commissioner earlier granting the registration to a trust or institution. Even assuming, the Commissioner has power to rescind the order of regi....
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....schooling or training given to the young in preparation for the work of life. Similarly, extending financial assistance/scholarship, etc., to students for their educational purpose would squarely and fairly fall within the connotation of "education" as per the ratio laid down in the case of CIT v. Saraswath Poor Students Fund [1984] 150 ITR 142 (Karn). Thus, the assessee is engaged in "educational activities" which falls under charitable purpose. 25. Recently, the hon'ble Supreme Court in the case of American Hotel and Lodging Association Educational Institute v. CBDT [2008] 301 ITR 86 has observed as under (headnote): "On the grant of approval, sections 11 and 13 did not apply. Once an applicant institution came within the phrase 'exists solely for educational purpose and not for profit' no other condition like application of income was required to be complied with. The prescribed authority was only required to examine the nature, activities and genuineness of the institution. The mere existence of profit/surplus did not disqualify the institution." 26. By taking the liberal approach, the Jharkhand High Court in the case of CIT v. Karimia Trust [2008] 302 ITR 57 has observed th....