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2013 (5) TMI 251 - AT - Income TaxRegistration u/s 12A cancelled - CIT was of the opinion that the assessee institution no more can be said to have carrying on charitable purpose in view of the amendment to section 2(15) - whether the assessee is regarded to have been established for charitable purpose even after insertion of proviso to Section 2(15) - Held that:- The assessee when applied for registration was very much a charitable institution as per the definition of the charitable purpose given u/s 2(15) at that time, therefore entitled for the registration u/s 12A. Once, the assessee no more remains being established for charitable purpose after the insertion of proviso in section 2(15), the eligibility of the assessee for registration stands cancelled. The CIT is the law implementing authority u/s 12A and therefore, it has power to rectify its order by cancelling / withdrawing the registration by rectifying the Order passed u/s 12A from the date when the assessee no more remains to be charitable institution as is held by us in the preceding para. A legal mistake has occurred in the order of the CIT dtd. 13.4.2006 from the date when the proviso under Section 2(15) has been inserted as the institution no more remains to have been created/established for charitable purposes or religious purposes. It is not the case of the assessee institution that it has been created or established for religious purposes. If the registration will remain continued, the purpose of amendment made in section 2(15) will be defeated and injustice will be caused to those institutions having the similar objects as the assessee has but created or established after the amendment in section 2(15) of the Income Tax Act. As going through the decision of the CIT V/s Sarvodaya Ilakkiya Pannai (2012 (2) TMI 160 - Madras High Court) issue before relates to the power of the CIT given under Section 12AA(3) and under these facts, the Madras High Court has upheld the order of the I.T.A.T. cancelling the withdrawal of the registration by the CIT under Section 12AA(3) as Tribunal held that there was no violation of the provisions of Section 12AA(3). The question whether there had been a legal mistake in the order by which the registration was granted was not before the Hon'ble High Court. Even otherwise, the decision of the Madras High Court is not binding on us in view of the decision of CIT Vs. Thana Electricity Supply Ltd. [1993 (4) TMI 37 - BOMBAY High Court] Thus CIT has rightly cancelled the registration granted under Section 12A as a mistake apparent on record as occurred in the order due to the amendment in section 2(15) and therefore no interference is called for in the order of the CIT. Against assessee.
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