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2021 (10) TMI 447 - ITAT HYDERABADCancellation of registration u/s. 12AA(3) - amendment in trust deed - Proof of change of object charitable - trust deed executed earlier was cancelled by resolving the trustees and reconstituted - HELD THAT:- The revenue has to consider whether the trust is carrying its activities as per the objectives/clauses or not. The only source of income is not the sole reason for cancellation of the registration unless its activities are beyond the object clause on the basis of which the registration was granted u/s. 12A. On examination of trust deed, we find that there is amendment in trust deed on the basis of the registration was granted. The society/trust is collecting fee from students and expending for the educational purpose and the surplus is not misappropriating other than its objects clause While cancelling the registration of the trust, which was granted earlier, the CIT(E) alleged that the remuneration paid to the trustees were very high, which is not a ground to cancel the registration. The assessee had submitted details for justifying the remuneration paid to Ms. Nirmala Diaz, founder trustee - CIT(E) has referred to clause 21 amended deed dated 20/12/2002 to cancel the registration that "the trustees shall not be entitled to any remuneration for their service put in by them in connection with the management of the trust", which is not having much weightage and not a ground to cancel the registration. Ms. Nirmala Diaz, founder trustee is coordinating for smooth running of day to day activities of educational institution. Even if the CIT(E) was not satisfied with her services rendered in consonance with the remuneration paid by the trust, he could have disallowed the excess expenditure as per his opinion, but the same should not be taken a ground to cancel the registration of trust. CIT(E) can cancel the registration only in situations, namely, i) if the activities of the such trust or institution are not genuine or ii) not being carried out in accordance with the objects of the trust or institution as the case may be. Both the situations are mutually exclusive. The trust is carrying educational activities which are within the purview of the object clause of the trust deed - cancellation of the registration is not in accordance with law and therefore, we direct the CIT(E) to restore the registration granted u/s. 12AA(1)(b)(i) - Decided in favour of assessee.
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