TMI Blog2014 (6) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... trust or institution are found to be non-genuine or its activities are not in accordance with the objects for which such trust or institution was established. DIT(E) has not given specific finding - Holding of seminars cannot be termed a commercial or business activity, as the trust was established for the specific purpose - DIT(E)has ignored the fact the trust had suffered loss by arranging seminars - Circular issued by the CBDT on 06. 04. 2011 clearly mentions that amendment would be applicable from the AY. 2011-12 and subsequent assessment years - before 01. 06. 2010 registration can be cancelled only on those cases where the registration has been granted under section 12AA(1)(b) of the Act - Before 01. 06. 2010 this section 12AA(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cancellation of registration granted to the assessee on the ground that the it was carrying on activities in the nature of trade, commerce or business, etc. Accordingly, vide show cause notice, dated 3. 11. 2011, the assessee trust was asked as to why the registration granted to it should not be withdrawn by invoking the provisions of section 12AA(3) of the Act as the income earned by it by holding seminar of Rs. 3, 04, 88, 920/- was in respect of the activities in the nature of trade, commerce and business. After considering the submissions of the assessee trust, the DIT (E) held that the amount received by the trust by holding seminar was in the nature of nature of trade, commerce or business, that the activities of the assessee-trust we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or business, that DIT(E) had failed to bring out any fact that the activities of the assessee trust were not genuine or were not carried out as per the objects of the trust, that the assessee was holding seminars solely for achieving and fulfilling the objects of the trust of parting with information and knowledge in respect of internet and its usage, that the activity of holding seminar was not in the nature of trade, commerce or business, that the seminars were held for attainment of the main objects of the trust, that out of the gross receipt(Rs. 3, 04, 88, 921/-);received by the assessee during the year under appeal;the major receipt was in the form of membership fees(Rs. 1, 90, 99, 691/-), that there was a deficit of Rs. 28, 60, 953/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010(Circular No. 1/2011[F. No. 142/l/2011-SO(TPL)-I, dated 6-4- 2011) has explained the background for bringing change in the section as under: 7. Cancellation of registration obtained under section 12A 7. 1. Section 12AA provides the procedure relating to registration of a trust or institution engaged in charitable activities. Section 12AA(3)previously provided that if the activities of the trust or institution are found to be non-genuine or its activities are not in accordance with the objects for which such trust or institution was established, the registration granted under section 12AA can be cancelled by the Commissioner after providing the trust or institution an opportunity of being heard. 7. 2. The power of cancellation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed the view that there must be specific findings with regard to the aforesaid two conditions. We find that the DIT(E) has not given specific finding as required by the Hon ble Madras High Court. Holding of seminars cannot be termed a commercial or business activity in the case under appeal, as the trust was established for this specific purpose. DIT(E)has ignored the fact the trust had suffered loss by arranging seminars. Circular issued by the CBDT on 06. 04. 2011 clearly mentions that amendment would be applicable from the AY. 2011-12 and subsequent assessment years. In the case of Agra Development Authority(supra). In that matter the assessee was granted registration under section 12A of the Act w. e. f. 01. 04. 2003 and vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sections makes it clear that before 01. 06. 2010 registration can be cancelled only on those cases where the registration has been granted under section 12AA(1)(b) of the Act. Before 01. 06. 2010 this section 12AA(3) nowhere empowers the CIT to cancel or withdraw registration under section 12A of the Act. In absence of such power, the registration granted under section 12A cannot be withdrawn or cancelled before 1. 6. 2010. The power of cancellation of registration under section 12A of the Act came to be incorporated by way of amendment introduced by Finance Act 2010 w. e. f. 01. 06. 2010. The C. B. D. T. Circular No. 1/2011 dated 06. 04. 2011 explains that this amendment will apply for A. Y. 2011-12 and subsequent years. Whereas, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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