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2015 (12) TMI 687 - AT - Income TaxRegistration granted u/s 12A rejected - Held that:- The accounts of the assessee club being maintained in a casual manner, which is one of the observations of the Commissioner of Income Tax cannot be the basis for cancellation. It is not the prerogative of the Commissioner of Income Tax to compare the data of two years as has been done by him as these are the matters which are to be looked in by the Assessing Officer at the assessment stage. In view of these, we do not find that the conclusion drawn by the learned Commissioner of Income Tax on the basis of these observations that the assessee is not carrying on the activities as per the objects or activities of the assessee are not genuine, is correct. Section 11 provides for exemption of 'income from property held for charitable or religious purposes'. This gives the computational provision for availing exemption, which is not free from conditions and provision at every stage of availing it. This exemption under section 11 of the Act together with the frills attached with it are subject matter of assessments on year to year basis. This is not the end, further conditions and checks are provided under section 13 of the Act also, which provides for 'section 11 not to apply in certain cases'. Provisions of this section are also under the jurisdiction of the Assessing Officer to be carried on during the assessment proceedings. In fact, the whole exemption for the year is forfeited in case of violation of any of the conditions provided in section 13. In such a scenario, we do not understand why the Commissioner of Income Tax is bothering himself to carry out such a cumbersome exercise in order to cancel the registration. The assessee being granted exemption under section 11 of the Act throughout and the way the assessee is carrying out the activities for the promotion of golf are the same from the beginning. This brings us to a point, where we can infer that it was the introduction of proviso to section 2(15) of the Act, perhaps, which was at the back of the mind of the learned Commissioner of Income Tax at the point of initiation of these cancellation proceeding. However, that otherwise also, cannot be the basis for cancellation. The learned Commissioner of Income Tax has also relied upon the judgment CIT Vs. Queen's Educational Society (2007 (9) TMI 347 - UTTARAKHAND HIGH COURT) which is also not applicable to the present case in view of the fact that the said judgment has been reversed by the Hon'ble Supreme Court of India in the case of M/s Queen's Educational Society Vs. CIT (2015 (3) TMI 619 - SUPREME COURT ). - Decided in favour of assessee.
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