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2010 (5) TMI 833 - AT - Income TaxExemption u/s 11 - registration u/s 12AA(3) denied - DIT(Exemption) stated that the registration u/s 12AA(3) was granted erroneously and therefore it was withdrawn from the first date of the registration -assessee is an autonomous body set up and governed by the provisions of The Gujarat Town Planning and Urban Development Act, 1976 (“GTP Act”) and was registered u/s 12AA of the DIT(Exemption) but subsequently cancelled the registration u/s 12AA w.e.f. 1-4-2002. HELD THAT:- As evident that once a trust or institution has been granted registration u/s12AA(3), subsequently, the if Commissioner finds that one of the conditions viz. (i) the activity of such trust or institution are not genuine, and (ii) the activity of the such trust or institution are not being carried out in accordance with the objects of the trust or institution is satisfied, then the Commissioner has power to cancel registration granted u/s.12AA(1) by passing an order in writing. Therefore, registration granted u/s.12AA(1) cannot be cancelled u/s.12AA(3) unless one of the conditions prescribed u/s.12AA(3) is satisfied. In present case, the assessee is recovering the cost as provided under the “GTP Act”, under which the assessee is functioning. Merely because the assessee is recovering the cost of the project, partially or wholly, it cannot be said that the activities of the assessee are not being carried out in accordance with the object of the institution. None of the conditions as prescribed u/s12AA(3) is satisfied in the case of the assessee so as to cancel the registration granted u/s 12AA. We therefore quash the order of the DIT(Exemption) passed u/s 12AA(3) and restore the order of the Registration passed by the DIT(Exemption) u/s12AA(1). In the result, the assessee’s appeal is allowed.
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