9911796707
TMI Blog2015 (12) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... registration under sect ion 12AA of the Act was granted to the assessee vide order dated 28.9.2005 by the Commissioner of Income Tax, Patiala. 3. A show cause notice dated 18.3.2014 was issued by the Commissioner of Income Tax proposing to cancel the registration under sect ion 12A of the Act . 4. To bring home the reasons for withdrawal of registration under sect ion 12AA of the Act , elaborate discussion was made by the Commissioner of Income Tax. In view of these observations, the learned Commissioner of Income Tax held that the activities of the assessee are clearly commercial in nature and not charitable right from the very beginning. Since the activities of the assessee fall in the category of "advancement of any other object of gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on yearly basis during the assessment proceedings. The mere fact that the assessee has been granted registration under sect ion 12A of the Act or 12AA of the Act as a charitable institution will have no bearing on the denial of registration. The fact that the object of the assessee may be hi t by the provisions of sect ion 2(15) of the Act cannot have any bearing on the grant , denial or withdrawal of the registration under sect ion 12A of the Act . In the background of these submissions, it was prayed that the order passed by the learned Commissioner of Income Tax under sect ion 12AA(3) of the Act for cancellation of registration under sect ion 12A of the Act be held to be not as per law. 7. The learned D.R. relied upon the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay in matters relating to registration of a trust or institution under sect ion 12A of the Act in respect of granting or declining of registration or in respect of cancellation. On perusal of the said order , we see that after a detailed discussion on various provisions of the Income Tax Act relating to the char i table activities together with legislative history of the said provisions, the I .T.A.T. , Amritsar Bench has held so. The relevant findings of I .T.A.T. , Amritsar Bench are at paras 9 and 10 of the order , which read as under : 9. We find that, as learned counsel rightly points out. the scope of powers of the Commissioner under section 12AA(3) for cancellation of registration already granted is very limited in scope in as muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(15) coming into the play and, for that reason, the objects of an assessee trust or institution being held to be not covered by the definition of charitable purposes', have no role to play in the matters relating to registration of a trust or institution under section 12A or 12AA - whether in respect of granting or declining of a registration or in respect of cancellation, even if otherwise permissible, of a registration. A close look at the scheme of the Act would unambiguously show this aspect of the matter." 10. On a closer look at the said order of the I .T.A.T. , Amritsar Bench, we f ind that the proposition so laid down by the I .T.A.T. , Amritsar Bench is based on the following reasons : i) The scope of powers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in such activities as may be hit by the first proviso to section 2(15) not only the assessee must be engaged in carrying out such activities as may hit the first proviso to section 2(15) but also the receipts of the assessee from such activities must exceed a specified limit. The second limb of this disability clause needs to be satisfied with respect to each assessment year. Obviously, therefore, this aspect of the matter cannot be examined at the stage of the grant or withdrawal of registration since the registration exercise is a one time exercise and not something which must be done for each assessment year separately. That is precisely the reason, as noted in the Explanatory Memorandum, as to why the remedy for the activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted earlier under sect ion 12A of the Act . 12. On the second content ion of the learned counsel for the assessee, we would also like to hold that the two basic requirements for cancellation of registration as provided under sect ion 12AA(3) of the Act , viz , the findings of the learned Commissioner of Income Tax to the effect that the activities of the assessee are not genuine or the activities are not being carried out in accordance with the objects on the basis of which registration under sect ion 12A of the Act was granted to i t , have also not been fulfilled in this case. The learned Commissioner of Income Tax has nowhere given a finding in this regard. I t is not the case of the Commissioner of Income Tax that the activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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