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TMI Blog2014 (7) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... (Exemption) erred in not considering the second written submission filed by the appellant vide letter dated 27th December 2011 addressed by its Authorised Representatives, MIs Contractor, Nayak & Kishnadwala. 3. Re: Registration under Section 12A: 3.1 That, on the facts and in the circumstances of the case and in law, the Learned Director of Income Tax (Exemption) erred in cancelling/withdrawing the appellant's application for registration under Section 12A. 3.2 That, on the facts and in the circumstances of the case and in law, the Learned Director of Income Tax (Exemption) erred in exercising his powers to withdraw/cancel the 12A registration certificate, granted to the appellant and failed to appreciate the fact that in pursuance to the provisions of Section 12AA(3), the registration once granted to the appellant, could only be withdrawn in specified situations namely, where the activities of the appellant are not genuine or where the activities are not carried out in accordance with the appellant's objects. 3.3 That, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trading, commerce or business, that gross receipts of the assessee were in excess of Rs. 10 lakhs, that provisions to proviso to section 2(15) of the Act were applicable in the case of the assessee from AY 2009-10. Vide, his letter dated 21.12.2011., DIT(E) issued a show cause notice to the assessee asking it as to why the registration granted to it should not be withdrawn by invoking the provisions of section 12AA (3) of the Act. It was stated in the show cause notice that the activities as carried out by the assessee were in nature of trade, commerce or business during the Ay 2009-10, that the details of the income in the income and expenditure account showed that assessee had earned income of Rs. more than 10 lakhs, that proviso to section 2(15) of the Act were applicable in its case, that the objects were in nature of advancement of any other object of general public utility. 3. Assessee, vide its letter dtd. 26.12.2011, made submissions before the DIT(E). After considering the submissions of the assessee and going through the facts of the case, he held that if any trust/institution; whose main object was for advancement for any other object and general public utility was carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities. He further argued that registration can be cancelled u/s 12AA(3), if the activities of trust were not genuine or activities were not carried out in accordance with the objections of the trust, that activities of the institution were genuine it was conducting examination besides supplying study material to participants and organising seminars etc. Departmental Representative (DR) argued that activities carried out by the assessee were for earning profit, that details of income and expenditure the activities taken by it were not genuine account proved the huge profit was earning by the assessee, that same was not coming out of charitable activities, that it was not carrying out any charitable activities, that institution was in the conducting exams, that it had collected Rs. more than 10 lakhs during the year under appeal, that it was hit by the provisions of proviso to section 2(15). In the rejoinder AR stated that DIT(E) had nowhere stated that assessee had made huge profit, that the assessee was in deficit, that as per the provisions of the Act it had to make investments, that if interest incomes and investments made according to the provisions of law were ignored there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons that the surplus was quite heavy. In the impugned order, it was mentioned by the Commissioner of Income-tax that there was an unusual huge margin and the petitioner was engaged in the commercial activities rather than charitable. As per the balance-sheet, huge amount from the student was charged. The profit margin embodied in the charges taken from the students was so huge and it proved the profit motive of the petitioner. We find that similar arguments were advanced by the DR. Deciding the matter in favour of the assessee, Hon'ble High Court has held as under: "In the instant case, the assessee is preparing students by providing coaching/guidelines to get admissions in professional institutions to pursue their studies. The sense in which the word "education" has been used in section 2(15) of the Act is the systematic instruction, schooling or training given to the young in preparation for the work of life. Similarly, extending financial assistance/scholarship, etc., to students for their educational purpose would squarely and fairly fall within the connotation of "education" as per the ratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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