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2014 (12) TMI 435 - AT - Income TaxCancellation of registration u/s 12A(a) Validity of exercise of jurisdiction by the Commissioner u/s 12AA(3) Conditions precedent for invocating the power of cancellation contained in section 12AA(3) of the Act are fulfilled or not Held that:- The significance of the registration granted to the assessee u/s 12A of the Act lies in the fact that it entitles the assessee to claim exemptions under section 11 of the Act, of course subject to the fulfillment of other conditions prescribed - in order to cancel the registration already granted, the Commissioner ought to be satisfied on two counts firstly, that the activities of the trust or institution are not genuine; and, secondly, that the activities are not being carried out in accordance with the objects of the trust or the institution - power of the Commissioner to cancel the registration u/s 12AA(3) of the Act is not without fetters, and is rather circumscribed by the conditions prescribed - a statutory authority has no power, jurisdiction or discretion to go beyond the statutory provisions - no power can be assumed in the absence of any specific provision relying upon The Commissioner of Income Tax-I, Madurai. Versus Sarvodaya Ilakkiya Pannai [2012 (2) TMI 160 - Madras High Court] - It is only on 07.08.2009 that a notice was issued by the Commissioner u/s 12AA(3) of the Act pointing out that assessee was promoting sport activity on a commercial basis by holding various tournaments of BCCI viz. Ranji Trophy Matches, World Cup Trial Matches, Twenty-Twenty Tournaments, etc. for which BCCI was making payments to assessee. According to the Commissioner, the aforesaid was a commercial activity so as to be hit by the proviso to section 2(15) of the Act as inserted by the Finance Act, 2008. As per the Commissioner, the activities of the assessee do not qualify to fall within the meaning of charitable purpose as per proviso to section 2(15) inserted with effect from 1.4.2009 - such an objection cannot be the basis of invoke section 12AA(3) so as to cancel the registration already granted to the assessee u/s 12A - registration already granted to the assessee could not have been re-visited by the Commissioner on the basis of the reasoning aforesaid, since his power to cancel registration u/s 12AA(3) was confined to the examination as to whether the activities of the assessee society/association are genuine or that the same are not being carried out in accordance with the stated objects - action taken by the Commissioner does not fall within the parameters of section 12AA(3) of the Act and the order is bad in law. The Commissioner has merely noted that there is an addition in objects clause, which has not been intimated to the Department and therefore the registration is required to be cancelled - in the absence of any finding that how the additional objects vitiate the registration earlier granted u/s 12A of the Act, the cancellation cannot be effectuated thus, the order of the Commissioner is set aside and the registration granted to the assessee u/s 12A is to be restored Decided in favour of assessee. Validity of order of CIT u/s 263 Commissioner directed AO to make fresh assessment Held that:- The AO specifically required the assessee to explain the subsidy received from BCCI of ₹ 21 crores along with its purpose and the assessee was also required to explain as to why the same may not by taxed in view of the amended section 2(15) of the Act - the AO made an active and conscious examination of the facts relating to subsidy by way of share in T.V. rights received from BCCI even in terms of the amended provisions of section 2(15) of the Act - the charge made by the Commissioner that the AO accepted the claim of the assessee for exemption u/s 11 of the Act with respect to the subsidy by way of share in T.V. rights received from BCCI without making enquiries cannot be upheld. It is difficult to uphold the charge made by the Commissioner of non application of mind by the AO AO examined the case of the assessee for grant of exemption u/s 11 of the Act in the context of the advent of new cricketing tournament, namely, T-20 tournament, etc. - no such tournaments have been conducted by the assessee during the year under consideration - it would have been appropriate for him to put such discussion in the body of the assessment order itself - on the preliminary issue itself, the order of the Commissioner is set aside Decided in favour of assessee.
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