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2022 (3) TMI 670 - AT - Income TaxExemption u/s 11 - withdrawing the registration u/s 12AA - provisions of Section 2(15) were invoked for denying the registration u/s 12AA - CIT(E) cancelled the registration of the assessee only on a finding that the assessee society is involved in the activities of the nature of business / commerce within the meaning of Section 2(15) only - DR contended that the assessee filed an application and later on suo moto withdrawal was filed when ld. CIT (E) went on examination of activities done by the assessee - HELD THAT:- Finance Act 2017 has brought an amendment in Section 12A, effective from A.Y. 2018-19 by inserting a new sub-clause (ab) in sub-section(1) of Section 12A requiring the trust/ institution to file an application to ld. CIT(E) within 30 days of the adoption /modification of the object which do not conform the condition of registration. It is thus very clear and not disputed by ld. DR also that this amended provision was not in force when the amendment in the object carried out in 2013. This legislative development also vindicates the appellant’s stand that there was no statutory requirement at the relevant time to intimate the amendment/ modification in the object of the institution claiming exemption u/s 11 of the Act.Since then there is no change in the facts and circumstances of the case, the fundamental facts accepted by the Department in past has to prevail as per principles of law laid down by the Hon'ble Supreme Court in Radhasoami Satsang vs CIT [1991 (11) TMI 2 - SUPREME COURT]. We agree with the argument of assessee that the Registration u/s 12AA of the Act, once granted, remains valid until it is cancelled by the Commissioner, by due process of law laid down u/s 12AA(3)/12AA(4) of the Act. It cannot cease to be operative unless order u/s 12AA(3)/12AA(4) of the Act is passed by the ld. CIT(E) in accordance with the law for cancellation of registration and that too on an application made by assessee for intimation of amendment in the object which was subsequently withdrawn. Thus, the order passed u/s 12A(1)(ab) is bad in law as well as on facts merely on a ground that the assessee is doing activities of the nature of business/commerce. Looking to ld.AR’s submission on merits explaining each activities specifying that they are within the definition of Section 2(15) and the comparison of the receipts alongwith the limb of Section 2(15), the GPU percentage is also less than 20%, the same is reproduced in assessee's submission hereinabove and thus even on merits the views of ld. CIT(E) is incorrect on facts . Decision that the ld. DR as pointed out in relation to the execution of commercial contract of Railways whereas in the case before us the same is implementation of various relief schemes and therefore, the same is differentiated. It is apparent and clear that the order passed by the ld. CIT(E) dated 20-03-2001 cancelling the registration of the Society u/s 12A(1)(ab) merely on a finding that the assessee is involved in the activities of the nature of business / commerce within the meaning of Section 2(15) of the Act is bad in law as well as on facts and therefore, the registration canceled is required to be continued and thus the appeal of the assessee is allowed.
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