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TMI Blog2015 (4) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 12A of the Income Tax Act, 1961 (for short hereinafter referred to as 'the Act'). 2. The respondent-assessee - Mandali was granted registration under Section 12A of the Act on 30.9.1986 by an order passed by the Commissioner of Income Tax. Subsequently, a notice came to be issued on 22.11.2011as to why registration under Section 12A of the Act should not be revoked by invoking the provisions of Section 12AA(3) of the Act by the authorities. In response to the said notice, the assessee filed its written submission on 16th December, 2011 and contested the matter. The authorities took note of the fact that the accounts for the year ended 31.3.2009 shows the total receipts by way of hiring Kalyana mantapa to an extent of Rs. 37,45,915/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as cancelled the registration observing that the examination of records shows that the Mandali has earned a net profit of Rs. 30,72,028/- for the assessment year 2008-09 and Rs. 42,23,142/- for the assessment year 2009-10. Under various heads the Mandali has earned huge profits and after taking note of the change in definition of Section 2(15) of the Act which came into effect from 1.4.2009, it held that the activity carried on by the assesse is in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business. Therefore, the consideration received irrespective of nature of use or application, or retention, of the income from such activity would take the case out of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution, without appreciating that clear finding is recorded holding activities of the assessee were not in accordance with the objects and the objects are amended without approval of the department and therefore, provisions of Section 12AA(3) of the Act were applicable and recorded a perverse finding? 6. The learned Counsel for the revenue assailing the impugned order contended that the definition of 'charitable institution' has undergone a change with effect from 1.4.2009. The activities carried on by the assessee is renting the Mandali charges for every services it renders. There is no element of charity or providing any services free of cost. Letting out of kalyana mantapa on daily basis amounts to commercial exploitation of its ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 12AA(3) of the Act reads as under: "[(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this subsection shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.]" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the amendment of first proviso to Section 2(15) of the Act. That is not a ground specified in the statute for cancellation of the registration. In fact, Sub-section (8) of Section 13 of the Act which is introduced by Financial Act, 2012 which came into effect from 1.4.2009 categorically provides that, nothing contained in Section 11 or 12 shall operate so as to exclude any income from the total income of the previous year or any receipt there of. If the provisions of the first proviso to clause (15) of Section 2 becomes applicable in the case of such person in the said previous year, the statute has protected the interest of the revenue. Notwithstanding the fact that the assessee is conferred registration under the provisions of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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