TMI Blog2015 (9) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... other statutory authorities. Therefore, it cannot be said that the T rust is not genuine. Admittedly, the students are being admitted every year. Students are studying in all courses. Thus the object of the constitution of the Trust namely imparting of education is going on uninterruptedly. Therefore, i t cannot be said that the activities of the Trust are not being carried out in accordance with the objects of the Trust. When the aforesaid two conditions are fully satisfied, on the ground that the trustees are misappropriating the funds of the Trust the registration of the Trust cannot be cancelled . If the trustees are misappropriating the funds, if they are maintaining false accounts, it is open to the authorities to deny the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and this amount has not been recorded in the cash book and it has introduced this cash to the bank as and when the need arises. The assessee has issued receipts for the sums received over and above the fees fixed by the University. (iv) Three of the Trustees of the assessee are also the Directors/Chairman in Yenepoya Institute of Medical Science Research Pvt. Ltd., (YIMSRPL), a private limited company. The assessee has invested ₹ 20 lakhs in ordinary shares of YIMSRPL during the previous year relevant to assessment year 1995-96 and continued to remain so invested up to 31.3.2005. The assessee is paying huge rent to YIMSRPL and also given huge deposit of ₹ 225 lakhs which was claimed as rent deposit. v) Search u/s.132 was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing on record to show that the activities are not being carried out in accordance with the objects of the Trust i.e., imparting education. Admittedly, the Trust is carrying on the object of the Trust namely imparting of education. The Trust is not sham or bogus. It is nobody s case that Trust is not in existence at all or that there is no activity of imparting education and therefore, the Tribunal has set aside the order passed by the Commissioner of Income Tax and restored the registration. Aggrieved by the said order, the revenue is before this Court. 4. The appeal was admitted to consider the following substantial questions of law: Whether the Tribunal was correct in holding that the registration granted u/s. 12A of the Act had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act need not be extended and such amounts should be taxed. But that is not a justification for cancellation of registration of the Trust. 7. Section 12AA provides for procedure for cancellation of registration of the Trust or Institution by the Commissioner of Income Tax. The power of cancellation of registration flows from the power to register. However, there has been unnecessary litigation on this issue. Under what circumstances, the registration of a Trust or Institution granted under section 12A could be cancel led by the Commissioner of Income Tax was the subject matter of various interpretation by the various High Courts. In order to avoid such unnecessary litigations, the Parliament introduced sub-section (3) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances namely, (1) When the activities of the Trust or Institution are not genuine; and (2) The activities of the Trust or Institution are not being carried out in accordance with the objects of the Trust or Institution. Only if the Commissioner is satisfied that any one of these conditions exists, then he shall pass an order in writing cancelling the registration of such Trust or Institution. Therefore what follows is, except the aforesaid two grounds and on no other ground, an order cancelling registration of the Trust could be passed. 8. In the instant case, the material on record shows that the Trust has established educational institution and imparting medical education. Every year, students are admitted. Huge investment i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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