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2016 (2) TMI 1023 - AT - Income TaxExemption u/s 12AA(3) cancelled - registration was cancelled by the authorities on finding its activities in nature of trade, commerce and business etc and also on the reason of that the gross receipt of the assessee became in excess of ₹ 10 lacs - Held that:- Both the aspects with regard to the cancellation of registration have duly been examined by the DIT(E) and thereafter took the action in accordance with law. The only proviso of the section 12AA(3) is in connection with giving an opportunity of being heard to the assessee which has also been given by virtue of notice dated 02.02.2012. Anyhow, apparently in view of the P & L Account the total sales is to the tune of ₹ 2,30,32,426/- and the net income from cost of sales has shown to the tune of ₹ 1,21,73,529/- and miscellaneous income has also shown to the tune of ₹ 6,14,126/- and the case is squarely covered in view of the proviso u/s 2(15) of the Act. Moreover, charitable purposes should be on record to carry out the exemption granted by the DIT(E). As discussed above receipts on account of sale of liquor, catering receipts and soft drink etc cannot be treated for charitable purposes. The receipt has also became very high i.e. more 25 lakhs thereforer in view of the said circumstances we are of the view that the purpose of the assessee is not the charitable purpose and value of receipt has became more than 25 lakhs therefore the learned DIT(E) has rightly cancel the registration as per provision of 12AA(3) of the Act in accordance with law. - Decided against assessee Order required to be implemented retrospectively - Held that:- Undoubtedly, the proviso to section 2(15) of the Act is effective from the assessment year of 2009-10 but in the instance case the matter was taken by the learned DIT(E) in pursuance of report / proposal received from ADIT(E)(II)(1), Mumbai. The order nowhere speaks that the report filed by the ADIT(E)(II)(1), Mumbai is in connection of any specific year, but it is quite clear that the authority examined the record of the assessee for the year of 2009-10. When the activities of the assessee was not charitable for the period w.e.f A.Y.2009-10 then no doubt the activities of the assessee is not required to be legalized on this fact that the order passed by the respondent on 01.03.2012. The record of the assessee speaks about this fact that the purpose of the assessee was not charitable for the period w.e.f 2009-10 then in the said circumstances we are of the view that the order is required to be implemented to the very assessment year 2009-10, not from the date of passing the order. Accordingly this issue is also decided against the assessee and in favour of Revenue.
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