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2015 (1) TMI 1202 - HC - Income TaxRegistration as a charitable trust under section 12A - Held that:- The fact that the receipts from commercial activities are more compared to the overall receipts of the charitable organisation can neither lead to the conclusion that the activities of the trust or institution are not genuine nor can it be said that the activities of the trust or institution are not being carried out in accordance with the objects of the trust or institution and, therefore, the two conditions stipulated under the provisions of sub-section (3) of section 12AA of the Act, which empowers the authority to cancel the registration, do not exist in the present case. The registration granted is cancelled in view of the amendment of the first proviso to section 2(15) of the Act. That is not a ground specified in the statute for cancellation of the registration. In fact, sub-section (8) of section 13 of the Act which is introduced by Finance Act, 2012, which came into effect from April 1, 2009, categorically provides that, nothing contained in section 11 or section 12 shall operate so as to exclude any income from the total income of the previous year or any receipt thereof. If the provisions of the first proviso to clause (15) of section 2 becomes applicable in the case of such person in the said previous year, the statute has protected the interests of the Revenue. Notwithstanding the fact that the assessee is conferred registration under the provisions of section 12A of the Act, unless the assessee falls within the provisions of section 2(15) of the Act, excluding the first proviso, the assessee would not be entitled to the benefit of exemption from the tax. If the case of the assessee falls in the first proviso to section 2(15) of the Act, the benefit of registration which flow from section 12A of the Act is not available. Anyhow, that is a matter to be considered by the assessing authority. But on that ground, the registration cannot be cancelled, which is precisely the Tribunal has held by allowing the appeal in the present impugned order. - Decided in favour of assessee.
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