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2014 (2) TMI 644 - AT - Income TaxCancellation of registration u/s 12AA of the Act - Denial of Exemption u/s 80G of the Act – Held that:- The assessee, the definition of 'charitable purpose' has several limbs - Proviso to section 2(15) of the Act is applicable only in respect of a charitable institution which has the object of 'any other object of general public utility' - Relying upon Krupanidhi Educational Trust v. DIT (E) 2012 (11) TMI 460 - ITAT BANGALORE] - in case of charitable purpose of providing education, the fact that educational institutions are being run on a commercial scale cannot be a ground to invoke the provisions of section 12AA(3) of the Act and cancel registration granted to a trust - the assessee has been pursuing the objects as per the objectives of the trust viz., providing medical relief. There is no whisper about the genuineness of the activities of the assessee in the order – thus, the two conditions for invoking the provisions of section 12AA(3) of the Act are totally absent - the complaint of the revenue in the order is only with reference to the hospital being run on commercial lines - so long as the income of the trust is applied for charitable purpose, there can be no question of any tax liability on the assessee - If there is any shortcoming in the application of income for charitable purpose, then to that extent the Assessing Officer in the assessment of the assessee, is free to tax such income which is not applied for charitable purpose – thus, canceling the registration u/s. 12AA of the Act would not be the appropriate course of action for the revenue - the order u/s. 12AA(3) of the Act deserves to be cancelled – thus, the order for restoring registration u/s. 12AA of the Act, recognition granted u/s. 80G of the Act should also be restored – Decided in favour of Assessee.
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