TMI Blog2013 (2) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... , this will not be a sufficient reason for cancelling the registration granted to the assessee under Section 12A(a). If in the very next year, assessee’s receipts are less than Rs. 10 lakhs, then it will have to be granted the exemption available under Sections 11 and 12 if other conditions are satisfied. Thus nature of objects of the assessee cannot fluctuate in tandem with the quantum of receipts mentioned in the first proviso. See Rajasthan Housing Board (2012 (5) TMI 100 - ITAT JAIPUR) and Gujarat Cricket Association (2013 (2) TMI 29 - ITAT AHMEDABAD) - DIT(E) fell in error in cancelling the registration granted to the assessee under Section 12A(a) - in favour of assessee. - ITA No.777/Mds/2012 - - - Dated:- 21-12-2012 - Abraham P Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry fees received from participants and sponsorship fees received from main sponsors of the events were only for the purpose of effectuating the objects of the society. To a question as to whether any benefits were derived by the sponsors on account of advertisement, assessee submitted that the championship races were conducted over five rounds and that through this, various components used by various engine manufacturers, were tested. As per ld. DIT(E), the championship races conducted by the assessee were to test durability and performance of components and this resulted in direct benefit to the sponsors. The sponsors of various events of assessee like MRF, UAM, UCAL and JK Tyres derived benefit from the assessee as per the ld. DIT(E). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Rajasthan Housing Board v. CIT [2012] 19 ITR (Trib) 524 (Jaipur), learned A.R. submitted that just because receipts exceeded Rs. 10 lakhs, grant of registration under Section 12A(a) could not be cancelled. Reliance was also placed on the decision of Ahmedabad Bench of this Tribunal in the case of Gujarat Cricket Association v. DIT(E) (2012) 19 ITR (Trib) 520. 4. Per contra, learned D.R. submitted that DIT(E) was justified in cancelling the registration granted to assessee under Section 12A(a) of the Act. According to him, Section 2(15) was substituted by Finance Act, 2008 with effect from 1.4.2009 and after such substitution, advancement of objects of general public utility, if it involved carrying on activity of trade, commerce, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. . .. (i) Undoubtedly, the objects and activities of the society comes within the advancement of any other object of general public utility. The same is not questioned either in the show cause letter or during the proceedings. In fact, application of the first and second proviso, after amendment w.e.f. 1.4.2009 is applicable for this kind of objects. Hence the reliance of learned A.R. on the Board s Circular and the various contentions that the activities of the society are covered within the definition of charitable purpose under the category of advancement of any other object of general public utility no way help the assessee from invoking Sec.12AA(3) which has been issued on the basis of business or commercial receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kh rupees or less in the previous year;] Both provisos are applicable from 01.04.2009. If we look at first proviso, no doubt it can be said that advancement of object of general public utility shall not be a charitable purpose, if it involved activity of trade, commerce or business or any service rendered in relation to any trade, commerce or business for a consideration. However, the second proviso, which was added by Finance Act, 2010, again with retrospective effect from 1.4.2009, brought in certain limitations on the application of first proviso. First proviso, as it stood independently till the latter amendment was brought in, clearly indicated that a violation thereof would result in an otherwise charitable object of general public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receipts exceeded Rs. 10 lakhs and if such receipts were of nature mentioned in first proviso to Section 2(15) of the Act, the Assessing Officer would, no doubt, be justified in denying exemption under Sections 11 and 12 of the Act. However, this will not be a sufficient reason for cancelling the registration granted to the assessee under Section 12A(a) of the Act. If in the very next year, assessee s receipts are less than Rs. 10 lakhs, then it will have to be granted the exemption available under Sections 11 and 12 of the Act, if other conditions are satisfied. In other words, nature of objects of the assessee cannot fluctuate in tandem with the quantum of receipts mentioned in the first proviso. Similar view had already been taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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