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2018 (5) TMI 2054 - AT - Income TaxExemption u/s 11 - cancelling the registration granted u/s 12A(a) - CIT(Exemptions) cancelling the registration granted under Section 12A(a), solely on the basis of observation made by the AO during the assessment proceedings as noted a large number of discrepancies in the accounts and affairs of the assessee society and rejected the claim of exemption and held its income to be taxable of AOP - DGIT has withdrawn the approval u/s 10(23C)(vi) on account of various irregularities pointed out by him and holding that the activities of the institution are not run solely for education and run for profit - there are violations regarding norms of Registrar of Societies and norms of AICTE and assessee misconducted itself by claiming that it is approved u/s 35(1)(iii) and donations made to it enjoy income tax exemption - HELD THAT:- As objects of the assessee society being education in nature and fall within the meaning of charitable purpose u/s 2(15) of the I.T. Act and since the society was registered u/s 12A allowed the claim of exemption u/s 11 of the I.T. Act. Since the appeal filed by the Revenue has already been dismissed by the Tribunal and upheld by the Hon'ble High Court and the assessee society is imparting education which is not in dispute, therefore, ld. CIT, in our opinion, is not justified in cancelling the registration granted earlier by invoking provisions of section 12AA(3) of the I.T. Act. The addition, if any, can be made by the Assessing Officer in the regular assessment but registration cannot be cancelled only on the basis of certain violations by the trustees unless and until it is proved that the assessee trust is not fulfilling its main object of imparting education. As relying on M/S. ISLAMIC ACADEMY OF EDUCATION [2015 (9) TMI 450 - KARNATAKA HIGH COURT] and considering the fact that the assessee trust is imparting education as per its main objects, we are of the opinion that the ld. CIT is not justified in cancelling the registration u/s 12AA(3) of the I.T. Act. We accordingly set-aside the order of the ld. CIT and restore the registration granted earlier. Decided in favour of assessee.
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