TaxTMI 
TaxTMI 
2024 (7) TMI 496
X X X X Extracts X X X X
X X X X Extracts X X X X
....61 ('the Act'). The appellant raised the following grounds of appeal : "On the facts and circumstances of the case and in law, the Ld. CIT(E) has:- 1. Erred in cancelling the registration granted to the assessee under section 12AA of the Act from the AY 2006-07 relevant to FY 2005-06. 2. Erred in consequently holding that since the registration under section 12AA is cancelled, the Appellant is ineligible for registration under section 12AB of the Act and, hence, cancelling/withdrawing ab-initio the registration under section 12AB, granted on 24th September, 2021. 3. Erred in not appreciating that the Appellant is engaged in the activity of providing secular education to all sections of society irrespectiv....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Trust with a residential facility for rector, matron and principal and the provision of free residence and food is only to avoid putting up the Trustees in a hotel and incurring additional expenditure and costs when they visit Panchgani for monitoring the trust activities. The impugned order has been passed without appreciating the facts of the case and is, therefore, liable to be set aside on this ground alone. 7. Erred in not appreciating that the investment in mutual funds was made to meet the statutory requirement of section 11(5) read with rule 17(C) of the ITAT Rules. It is further submitted that the investments made in Mutual Funds are out of accumulations and corpus donations. The accretions in investments are on accou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eciating that Appellant was always registered under section 12A of the Act and had further made an application for grant of registration before the Pr.CIT as per sub clause (i) of clause no.(ac) of subsection (1) of section 12A of the Act and therefore the provisions of section 12AB(4) of the Act which became applicable from 1.04.2022 and applies prospectively cannot be invoked in the facts of the present case. 13. Erred in holding that the Appellant was a Revocable Trust. The CIT(E) erred in holding that even though the Trust is running a school the overall arrangement of the provisions of Trust Deed indicate that they are for the benefit of persons covered under section 13(3) and hence, the activity cannot be considered as a genu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of property for herself, family and guests during her life time; (ii) Clause (4) of the trust deed had made a provision for payment of honorarium to the settlor; (iii) Clause (12) of the trust deed had also provided for power to revoke the trust deed at her discretion; and (iv) The appellant trust is engaged in the business of investment, redemption of mutual funds. 4. On receipt of the show cause notice, the assessee submitted that the question of utilising the trust property for the benefit of the settlor does not arise as the settlor had passed away in the year 1965. It is further submitted that the clauses in trust deed providing for accommodation to the settlor of the trust had become infructuous since the settlor had expired i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct that the appellant trust made huge investments in mutual funds goes to show that the objects of the trust are not genuine and are not charitable in nature. Therefore, the ld. CIT(Exemption) was justified in cancelling the grant of registration u/s.12AA of the Act. 7. We heard the rival submissions and perused the material on record. The solitary issue that arises for consideration before us is whether or not the ld. CIT(Exemption) was justified in cancelling the registration granted u/s.12AA of the Act. The provisions of section 12AA(3) empower the CIT to cancel the registration granted u/s.12A of the Act only on the existence of one of the two conditions in the said section, i.e., (1) the activities of the trust are not genuine; and ....