TMI Blog2015 (6) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... not exist in the present case. The registration granted is cancelled in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 3,12,000/ and excess of income over expenditure is only 19.35% of the gross receipts. 3. The Director of Income Tax (Exemption) considering the entire material on record, by his order dated 26.10.2010, exercising his powers under the provisions of Section 12A of the Act has cancelled the registration observing that the examination of records shows that the dominant activity of the Trust is letting out the choultry on daily rental basis which is in the nature of business and hence, not charitable irrespective of quantum of rent charged and the assessee 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were commercial in nature and therefore cannot be considered as charitable under Section 2(15) of the Income Tax Act? (ii) Whether the Tribunal was correct in holding that the Director of Income Tax (Exemption) has not given any finding with regard to genuineness of the activities or the activities not in accordance with the objects of the institution, without appreciating that clear finding 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was granted registration under Section 12A of the Act. Now the said registration is cancelled by invoking the power conferred under the provisions of Section 12AA(3) of the Act. Therefore, it is necessary to find out under what circumstances the registration granted earlier could be cancelled. Section 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 accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being carried out in accordance with the objects of the trust or institution and therefore, the two conditions stipulated under the provisions of sub-section (3) of Section 12AA of the Act, which empowers the authority to cancel the registration, do not exist in the present case. The registration granted is cancelled in 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 previ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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